Jul 11, 2018 | By Alice Gividen
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Michael Kors is firmly in the driving seat to buy Jimmy Choo. After failing to win the hand of Kate Spade, The US fashion house has reached a deal in principle to buy its smaller UK-based luxury segment peer for almost £900m, well above the expected £800m price tag. The news sent Choo shares rocketing 17% to 228p in early morning trade.
Kos and Choo said Tuesday that they’ve reached agreement on a cash acquisition with the “entire share capital of Choo will be acquired by Kors subsidiary JAG Acquisitions.”
Shareholders will get 230p in cash for each Jimmy Choo share. The shares closed at 168.5p the day before the firm announced it was for sale back in April, but have been trading just under or just over 200p in recent weeks. That values the firm at £896m.
Michael Kors said it believes it is “the ideal partner for Jimmy Choo and is well positioned to support continued growth.”
Observers believe than will mean many more Jimmy Choo stores globally, especially in an under-served Asia market.
The company is also promising “further development of its online presence” alongside “an expanded assortment of additional fashion product offerings”, although Kors has yet to elaborate on specific plans for the brand and whether it will include clothing.
Jimmy Choo will continue to operate under its existing management team of Pierre Denis, Sandra Choi and Jonathan Sinclair within the Michael Kors organisation.
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