Coach launches $18.50 per share tender offer to acquire Kate Spade & Company

By

Obi Anyanwu

Published
May 29, 2017

Coach on Friday announced that its wholly owned direct subsidiary, Chelsea Merger Sub Inc., has launched a tender offer for all of the outstanding shares of common stock, par value $1.00 per share, of Kate Spade & Company at a price of $18.50 per share.
 

The tender offer, which will expire on June 23, 2017 at 11:59pm unless extended, is subject to customary conditions to closing.
 
The New York City-based company in May announced the acquisition of Kate Spade for $2.4 billion. The two fashion companies’ respective board of directors unanimously approved the deal, which includes Kate Spade shareholders receiving $18.50 per share in cash.

Coach won a bidding war with Michael Kors over the rights to Kate Spade. Reports indicated that Coach grew interested in Kate Spade for its millennial appeal.
 
Hours after the acquisition announcement, shareholder rights firm Johnson & Weaver began investigating whether the Kate Spade board breached their fiduciary duties by accepting the $18.50 share price. According to the firm, the share price is $7.50 less than what Wall Street analysts priced the stock.