Shares of Coach and Kate Spade parent Tapestry jumped Thursday morning while those of Michael Kors and Versace owner Capri Holdings fell after they called off their planned merger over ongoing legal challenges.

Fashion group Tapestry said Thursday that it was dropping its $8.5 billion bid for Capri, the owner of luxury brands including Michael Kors and Versace, following a successful legal challenge by US regulators.

Tapestry is terminating its $8.5 billion deal to buy Michael Kors-owner Capri following a legal hurdle, the companies said on Thursday, ending their effort to create a U.S. luxury giant to compete with major European players.