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.

The timing and valuation could change and discussions 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.

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.

The Italian company had spent weeks evaluating Versace with its advisers, and had gained exclusive access to its latest financial and sales figures, Bloomberg News reported in February, citing people familiar with the situation.

Even with a deal, Prada will be worth a fraction of its biggest competitors. The Hong Kong-listed fashion house has a market capitalization of about HK$169.4 billion ($21.8 billion), following a 10% share gain since the start of the year. Miuccia Prada’s family and her husband Patrizio Bertelli control about 80% of the company.

French conglomerate LVMH, which owns Louis Vuitton and Christian Dior as well as a string of Italian brands including Fendi and Loro Piana, has a market value of €347.5 billion. LVMH last year bought a stake in the company that controls Moncler SpA, the Italian maker of designer outerwear.

Versace reported revenue of $193 million for the third quarter of the current fiscal year, a 15% year-on-year decline, according to a statement. Over the same period, the brand’s operating loss widened to $21 million for $14 million.

Source: FINANCE.YAHOO