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LVMH Proposes Tiffany Takeover

Offer values US jeweler at $14.5 billion.
Oct 27, 2019 6:23 AM   By Rapaport News
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RAPAPORT... LVMH Moët Hennessy Louis Vuitton has approached Tiffany & Co. about acquiring the US jeweler for almost $15 billion, according to media reports. 

The Paris-based luxury group submitted a non-binding offer to Tiffany earlier this month, Reuters reported Sunday, citing unnamed sources. Tiffany has hired advisers to review the proposal, but has not yet responded, the news agency continued.

“In light of recent market rumors, the LVMH group confirms that it has held preliminary discussions regarding a possible transaction with Tiffany,” the company said in a statement Monday. “There can be no assurance that these discussions will result in any agreement.”

The bid of about $120 per share values Tiffany at roughly $14.5 billion, representing a 22% premium over the jeweler’s closing price on October 25, according to the Financial Times. The company is likely to reject the approach, believing it undervalues the business, the UK newspaper added, citing people with knowledge of the matter. The stock peaked at $139.50 in July 2018.

“[Tiffany’s] brand equity, strategic positioning as a gifting authority, [and] brand DNA as a diamond and bridal authority are leading qualities and deserve an exceptional premium,” said analyst Oliver Chen at Cowen and Company in a research note Sunday.

A takeover would bring Tiffany under the same roof as Bulgari, Chaumet and TAG Heuer, adding extra US power to LVMH’s portfolio. It would also reunite Tiffany CEO Alessandro Bogliolo with his former home: The executive held senior positions at Bulgari and Sephora, another LVMH label, in the earlier years of his career.

Tiffany confirmed the $120-per-share offer Monday, but noted that the parties were not engaged in discussions.

“Tiffany’s board of directors, consistent with its fiduciary responsibilities, is carefully reviewing the proposal, with the assistance of independent financial and legal advisors, to determine the course of action it believes is in the best interests of the company and its shareholders,” the jeweler added.

Update, October 28, 2019: The latest version of this story contains a comment from LVMH and additional information about the takeover approach.

Image: A Tiffany necklace. (Jackie/Flickr)
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Tags: Alessandro Bogliolo, Bulgari, Chaumet, Jewelry, LVMH, LVMH Moët Hennessy Louis Vuitton, M&A, mergers and acquisitions, paris, Rapaport News, retail, Sephora, Tag Heuer, Tiffany, Tiffany & CO., US
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