(Bloomberg) — Prada SpA is moving closer to a deal to buy Versace from Capri Holdings Ltd. after agreeing to a price of nearly €1.5 billion ($1.6 billion), according to people familiar with the matter.
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Milan-based Prada and Capri could finalize a deal for the Italian luxury clothier this month, said the people, asking not to be identified because discussions are private. Talks are progressing after initial due diligence didn’t find any risks, the people said.
The timing and valuation could change and negotiations could still fall apart, the people added. Capri, which bought Versace in 2018 for about €1.8 billion, didn’t immediately respond to requests for comment on Sunday. Prada declined to comment.
Prada shares rose as much as 4.1% Monday in Hong Kong, where the stock was listed in 2011 in a nod to the importance of the Chinese market.
A potential acquisition of the fashion house founded by the late designer Gianni Versace in 1978 would allow Prada to create a larger Italian player to better compete with global luxury groups such as LVMH and Kering SA.
A purchase would reverse a decades-long trend of Italian fashion groups, including Gucci and Valentino, being taken over by foreign rivals.
“Prada would be well positioned to realise Versace’s brand potential in the long term, potentially paving way for the group to become Italy’s answer to the French luxury conglomerates,” UBS Group AG’s analysts led by Susy Tibaldi said in a Feb. 28 note.
Prada emerged as one of the luxury sector’s winners amid a global downturn for high-end fashion items. Its sales surged in the third quarter of last year on the back of its Miu Miu brand, a label popular with younger consumers.
The Italian company spent weeks evaluating Versace with its advisers, gaining exclusive access to financial and sales figures, Bloomberg News reported in February, citing people familiar with the situation.
The aesthetics of the minimalistic Prada and “maximalist” Versace “are polar opposites” and wouldn’t run the risk of cannibalization, the UBS analysts said in a note.
Even with a deal, Prada will be worth a fraction of its biggest competitors. The fashion house has a market capitalization of about HK$175 billion ($22.5 billion), following a 14% share gain since the start of the year. Miuccia Prada’s family and her husband Patrizio Bertelli control about 80% of the company.
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