Shares of Capri Holdings (CPRI) fell sharply on Friday after a federal judge ruled to block a proposed acquisition by Tapestry (TPR), citing antitrust concerns. Both companies have announced their intention to appeal this decision.
Bernstein analyst Aneesha Sherman joins Market Domination to assess the investment potential of both companies in light of this development.
“The real question is whether this will be overturned on appeal,” Sherman explained, noting that the appeals process could last several months. She stressed that February 10, 2025 is “a kind of final day” on which either party can legally terminate the agreement.
Sherman said “the odds have changed significantly” for the deal to fail, which he believes is “a very good thing for Tapestry.” He noted that Capri’s performance has declined since the deal was announced, saying the company is “underperforming quarter after quarter, making it an increasingly less attractive asset to buy.”
Meanwhile, Sherman believes Capri could only turn around if it sells its Jimmy Choo and Versace brands to focus on Michael Kors.
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This post was written by Angel Smith
