03:25 PM EDT, 04/17/2024 (MT Newswires) -- (Adds details from Bloomberg report in the third and fifth paragraphs and updates stock movement in last paragraph.)

The US Federal Trade Commission is preparing to block Tapestry's (TPR) potential $8.5 billion takeover of Capri Holdings ( CPRI ) , according media reports Wednesday.

The FTC is scheduled to discuss the matter next week and determine whether to proceed with legal action, The New York Times reported, citing two unidentified people with knowledge of the matter.

The antitrust agency is expected to file a lawsuit as soon as Monday, Bloomberg reported.

Tapestry, the maker of Coach handbags, announced in August it would acquire Capri for $57 per share in cash. The deal, which has been cleared by European Union and Japan regulators, would bring together the brands Coach, Kate Spade, Versace, Jimmy Choo and Michael Kors.

Failure to close the deal will prompt Tapestry to redeem bonds it sold last year to partly finance the deal, according to Bloomberg's report.

The FTC declined to comment, while Tapestry and Capri did not immediately respond to requests for comment by MT Newswires.

Tapestry's shares were 1% lower in recent trading, while Capri shares were down more than 2%.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)