- French luxury company LVMH is close to a $16.7 billion deal to buy Tiffany & Co, sources said on Sunday as Louis Vuitton and Bulgari’s owner seeks to enter the fast-growing luxury jewelry market.
- All sides were close to an agreement after the French luxury goods group increased its offer price to $135 per share for the company known for its commitment rings and ties to Hollywood glamor, sources familiar with the issue said.
French luxury company LVMH is close to a $16.7 billion deal to buy Tiffany & Co, sources said on Sunday as Louis Vuitton and Bulgari’s owner seeks to enter the fast-growing luxury jewelry market.
Both companies ‘ boards are scheduled to meet on Sunday to approve the US jewelry chain’s $135 per share bid from LVMH.
All sides were close to an agreement after the French luxury goods group increased its offer price to $135 per share for the company known for its commitment rings and ties to Hollywood glamor, sources familiar with the issue said.
On Sunday, one source said, the boards of both companies will announce the terms of the deal.
A deal could be announced later on Sunday or on Monday, two other sources said. Two other sources said that a deal could be announced later on Sunday or Monday. It would be the largest acquisition by LVMH. The latest price is higher than last week’s $130 and $15 higher than the initial all-cash offer LVMH managing director Antonio Belloni presented to Tiffany on Oct. 18.
This represents a premium of 7.5 percent over the closing share price of Tiffany on Friday and is more than 50 percent higher than where the price was before LVMH began its attempt to woo the company. The two firms did not respond to requests for comments immediately. The words are not understood, apart from the price tag.
LVMH, owned by Europe’s richest man, Bernard Arnault, has eyed the company for years after buying Italy’s Bulgari in 2011 for 3.7 billion euros, at the time the largest luxury goods deal in a decade.
A deal for the jeweler will broaden the French company’s exposure to US luxury customers, giving it an iconic 182-year-old brand famous for its robin egg blue boxes and its appearance as Holly Golightly’s favorite haunt in Truman Capote’s “Tiffany’s Breakfast.”
Adding the brand to a stable that includes the Bulgari jewel and watches label, Christian Dior fashions, Hublot watches and Dom Perignon Ch watches. Jewelry is one of a few luxury industry markets where LVMH is not the leader, “and we know that Mr. Arnault still wants to be No. 1,” RBC analyst Rogerio Fujimori said in a statement.
“Tiffany will become a better company and a stronger rival owned by LVMH.” Even after the 30 percent increase on Monday, Tiffany’s shares are well below its $139.50 high in July 2018.
According to Cowen & Co. analyst Oliver Chen, a fair value of the jeweler would be around $160 a share or higher. He wrote in a note on Sunday that Tiffany’s “strategic positioning as a gifting authority, product DNA as a diamond and bridal authority, are leading qualities and deserve an outstanding premium.”
In early afternoon trading, LVMH based in Paris has changed nothing. It has jumped around 50% this year, giving it a market capitalization of about $215 billion. The French company has been riding a wave of luxury demand in China but faces threats including the trade war with the US in that country and the months-long demonstrations against Beijing in Hong Kong.
It opened a new Louis Vuitton factory in Texas earlier this month in a ceremony that included President Donald Trump as the French company sharpens its attention to the U.S., its second-largest market from Asian sales.