Tapestry, parent company of Coach, soars to 11-year high after ending embattled quest to acquire Michael Kors, Jimmy Choo
It sure looks like investors are enthralled by the prospect of a more corporate-friendly, laissez-faire M&A regime once President-elect Donald Trump returns to the Oval Office.
US banks — in particular, regional banks — have been on fire since the November 5 vote on the outlook for higher fees in their advisory businesses. Discover and Capital One, for instance, are each up double digits since the election on increased confidence that their deal will close.
But in the here and now, there are still deals falling apart as the Biden administration winds down.
Tapestry, the parent company of the Coach luxury brand, came to a mutual agreement with Capri, the parent of Michael Kors, to call off their planned acquisition.
The agreement had been put in serious jeopardy after a US District Court in New York blocked the deal last month for antitrust concerns, pending a ruling by the Federal Trade Commission. Shares of Capri, the target company, crumbled in the wake in that ruling. On Thursday, the companies said it was unlikely that any of their appeals would bear fruit before the deadline to close the deal, which is less than three months from now.
The court’s decision was billed as a big win for FTC Chair Lina Khan, but it turns out it might have been a big one for Tapestry as well: it’s the best-performing S&P 500 constituent on Thursday, up 12.2% as of 10:38 a.m. ET, hitting its highest level since 2013.
What’s better than buying other luxury brands? Buying back the bonds you would’ve used to acquire that company, and generating enough cash to buy back your own stock, too. Those are Tapesty’s plans in the wake of the scuttled deal.
