Market Insider

Kate Spade shares dive as company considers takeover bid

A pedestrian walks past a Kate Spade store in Corte Madera, California.
David Paul Morris | Bloomberg | Getty Images

Shares of Kate Spade plunged early in the trading day Tuesday after the company sought more time to consider a buyout offer from Coach, worrying investors that bids were lower than expected.

The handbag and accessory maker saw a share price dip of more than 14 percent to around $19.30 per share. The stock was on pace for its worst day since Aug. 3 when it lost 18.22 percent.

Five-day performance of Kate Spade

As the company mulls whether or not to accept the offer — or an offer from other interest parties, like Michael Kors — three anonymous sources told CNBC that a deal is likely to value the company at below its current trading price.

"If they had gotten the bid they wanted, they wouldn't be asking for more time," Simeon Siegel, retail analyst at Nomura Instinet, told CNBC.

With the day's moves, shares of Kate Spade are still up 5 percent so far this year.