Mazal! (Again!) LVMH Buying Tiffany for $400 Million Less

LVMH has gotten Tiffany & Co. to do what many thought impossible: sell at a discount.

Nearly 11 months after the luxury conglomerate struck a deal to buy Tiffany & Co. for $16.2 billion, it’s now struck a second deal to buy it for $15.8 billion, more than $400 million less than the original price.

The new agreement comes after LVMH declared in September that it was no longer bound by the terms of the original deal, sparking an often-bitter legal battle, which this pact ends.

The renegotiated price comes to $131.50 a share—less than the $135 a share LVMH pledged to pay last year, and far below the $139 a share Tiffany’s board originally sought. The new price is, in fact, not much higher than the $130 a share that LVMH offered as a follow-up to its original bid, which Tiffany’s board rejected.

The new deal still requires approval by Tiffany’s shareholders. Assuming that approval comes, the deal is meant to close in early 2021. The original deal was supposed to close last summer.

In contrast to last year’s announcement, where the two sides showered each other with accolades, the release LVMH put out Thursday was relatively restrained, perhaps reflecting the seven-week legal and public relations war that preceded it.

“We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger,” said board chairman Roger N. Farah in the statement. “The board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing.”

Said LVMH president and CEO Bernard Arnault in the same statement: “This balanced agreement with Tiffany’s board allows LVMH to work on the Tiffany acquisition with confidence and resume discussions with Tiffany’s management on the integration details. We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter.”

The modified agreement allows for Tiffany to pay its regular quarterly dividend of $0.58 per share on Nov. 19. The other terms of the merger agreement remain unchanged.

(Image courtesy of Tiffany & Co.)

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