Tiffany Wants LVMH to Up Its Offer, Says Report

Tiffany & Co. has told luxury conglomerate LVMH that it will need to boost its $14.5 billion acquisition offer if it wants the famed retailer to become the latest jewel in its crown, Reuters reported yesterday.

Despite past Tiffany executives’ resistance to takeovers, Tiffany’s board of directors is apparently ready to make a deal, provided the price is right, said the report, which quoted anonymous sources.

“Tiffany informed LVMH it could open its books and provide confidential due diligence if the French luxury group sweetens its offer,” said the report.

The news agency said that LVMH is “engaged” in the process and is mulling a new offer.

It is perhaps not surprising that Tiffany’s board has seemingly rejected LVMH’s initial all-cash bid, which came out to approximately for $120 a share. At press time, Tiffany’s stock was trading at $124 a share.

Reuters said sources have previously indicated that Tiffany’s board was looking for a price around $140 a share, which its shares reached last year.

However, a New York Post report from last week said that the Paris-based conglomerate is unlikely to boost its bid more than $5 a share.

“Executives of the French luxury goods giant are bristling at calls by Wall Street analysts for LVMH to significantly sweeten its [offer]—claiming that the premium it has offered is actually far higher than the Street realizes,” the Post said. “[LVMH chairman and chief executive officer Bernard] Arnault is likely only to increase his offer by a small amount.”

That was echoed by CNBC reporter David Faber, who said that it was “highly unlikely” that LVMH would stretch its offer to $139 a share.

Prior to LVMH’s offer being publicized, Tiffany’s shares were trading around $98.

LVMH and Tiffany could not be reached for comment, and the parties have not issued any public statements since confirming LVMH’s initial bid last week.

LVMH’s watch and jewelry division includes jewelers Bulgari, Chaumet, and Fred, as well as watch brands Hublot, TAG Heuer, and Zenith.

(Image courtesy of Tiffany & Co.) 

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JCK News Director