In April, JAB said it was reviewing options for the shoe brand and leather-goods maker Bally International AG to step away from fashion and footwear. The company plans to focus on its food and beverage businesses, which has grown into one of the world’s largest coffee sellers through acquisitions of brands such as Caribou Coffee Co., Krispy Kreme Doughnuts and Panera Bread.
18% Premium
Michael Kors will pay 230 pence a share for the luxury shoemaker, a premium of 18 percent over Monday’s close, the companies said Tuesday. The price is equal to about 13 times Jimmy Choo’s adjusted Ebitda for 2017, according to Bloomberg Intelligence analyst Deborah Aitken.
Michael Kors stock has lost about two-thirds of its value since peaking in February 2014. The stock had more than doubled in the two years prior. Jimmy Choo shares rose as much as 17 percent in London Tuesday, coming within 1 penny of the bid price. Michael Kors rose 2.8 percent to $35.90 in pre-market trading.
“Jimmy Choo is a higher-end brand that gives Kors a bit more diversity,” said John Guy, luxury analyst and managing director at MainFirst Bank AG.
The deal could be susceptible to a counteroffer, Guy said, as some minority shareholders are likely to hold out for a better price.
BofA Merrill Lynch and Citigroup advised Jimmy Choo. Goldman Sachs and JPMorgan Chase & Co. advised Michael Kors, which said it would keep Jimmy Choo’s existing management team, led by Chief Executive Officer Pierre Denis.
This article was provided by Bloomberg News.