- Huw Hughes
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LVMH has reportedly offered to buy US jeweller Tiffany & Co. for about
14.5 billion dollars, according to sources close to the situation.
The group, which owns luxury brands Louis Vuitton, Christian Dior and
Marc Jacobs,
approached New York-based Tiffany earlier this month with an all-cash
takeover bid, Bloomberg reported, citing people close to the matter. The
bid values the jeweller at around 120 dollars per share, or about 22
percent more than the company’s 25 October closing price, according to one
source.
If the takeover bid is successful, it will be the biggest one yet for
LVMH founder Bernard Arnault, who is Europe’s richest man.
Tiffany is currently mulling the offer and no agreement is guaranteed,
the sources said. The US jeweller is expected to reject the offer as
undervalued, the Financial Times reported Sunday, citing people familiar
with the situation.
LVMH makes takeover bid for Tiffany
“Tiffany could prove an interesting fit to LVMH, which is still
underpenetrated in jewelry,” said Deborah Aitken, senior luxury-goods
analyst at Bloomberg Intelligence, adding that the acquisition of Tiffany
could help LVMH compete against rivals such as Swiss rival Richemont SA.
In the first nine months of 2019, the Watches & Jewellery business group
of LVMH recorded organic revenue growth of 4 percent, driven by jewellery
with Bvlgari reporting excellent performance, especially in its own
stores.
In the same period, LVMH beat sales forecasts, with third-quarter
revenue up 17 percent to 13.3 billion euros, despite U.S.-China trade
tensions and ongoing unrest in Hong Kong, an important shopping hub for
luxury brands.
For the year ended 31 January 31, Tiffany reported 4.4 billion dollars
in sales and 586.4 million dollars in net income.
Photo credit: Tiffany & Co. Facebook
