LVMH Moet Hennessy Louis Vuitton SA agreed to buy Donna Karan International Inc. for $243 million in cash and assumed debt, 25 percent more than the largest luxury-goods maker originally offered for the clothing company.
Approval of the sweetened cash bid by the Donna Karan board triggers a price-reduction clause in a separate agreement to buy Gabrielle Studio Inc., owner of the Donna Karan brand. As a result, LVMH will acquire the two businesses for $643 million dollars, about the same price it was offering in December.
The purchase is LVMH's 16th since 1999, bringing the Donna Karan and DKNY labels under control of the same company that owns Kenzo, Givenchy and Pucci. The offer follows a decline in the Donna Karan shares to about a third of the $28 they sold for in a 1996 initial public offering.