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LVMH collars Donna Karan
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December 18, 2000: 1:32 p.m. ET
French firm buys licensor for $450M, eyes NY fashion house itself for $195M
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LONDON (CNNfn) - France's LVMH announced Monday a $450 million buyout of a licensor of Donna Karan International trademarks, and offered another $195 million to buy the New York fashion house itself.
LVMH Moet Hennessey-Louis Vuitton, one of the world's largest luxury goods makers, agreed to buy Gabrielle Studio Inc., a licensor owned by designer Donna Karan and her husband Stephan Weiss.
Separately, the French company bid $8.50 per share for Donna Karan International, for a premium of 74 percent over Friday's closing price of Donna Karan (DK: Research, Estimates) shares. The clothier's stock rocketed $3.56 to $8.44 in early New York trading on Monday. 
Karan and Weiss also agreed to exchange a "significant" portion of their shares in Donna Karan International for shares in the combined company. They also said they would accept a reduction of up to $50 million off the $450 million price tag if LVMH completes a DKI purchase within one year.
"LVMH has the expertise, resources, global scale and vision to help me realize the full potential of Donna Karan and DKNY as worldwide luxury lifestyle brands," Ms. Karan said in a statement.
Donna Karan International last month warned its revenue would come up short of what analysts had expected. The stock hit as high as $9.37 earlier this year, but recently traded at a year low of $4.25.
LVMH (PMC) climbed 4.7 percent to  73.15 in Paris Monday afternoon.
The French company, controlled by Bernard Arnault, said the possible purchase of Donna Karan International would add $2 million-to-$3 million to LVMH's earnings in 2000, Reuters reported. 
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