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‘LVMH sweetens Tiffany offer’
Posted on Thursday, 21 November 2019 14:40
Tiffany is believed to have granted LVMH Moet Hennessy - Louis Vuitton access to its books after the French luxury goods powerhouse sweetened its initial USD 120.00 per share proposal to close to USD 130.00 apiece.
Shares in the iconic US high-end retailer were up 3.2 per cent in pre-market trading at USD 127.27, from a close of USD 123.33 on 20th November and a capitalisation of USD 14.90 billion.
The reported new bid would represent a premium of 31.9 per cent to the group’s stock price of USD 98.55 on 25th October, the last unaffected finish before news emerged of the approach.
Reuters said the iconic US jeweller intends to continue negotiating for a higher offer and if it does reach an agreement, will keep the Bulgari and Tiffany brands as separate entities.
People close to the matter told Bloomberg executives rejected the original USD 120.00 apiece bid as being too low as they believe the company could fetch similar earnings multiples within the sector.
As it stands, analysts at Credit Suisse and Cowen think an offer could reach USD 140.00, or even as high as USD 160.00 million, respectively, the news provider added.
Separately, sources with knowledge of the situation told the Financial Times (FT) the latest proposal values Tiffany at USD 15.80 billion, including USD 350.00 million in debt.
They added LMVH may now have access to New York City-headquartered luxury retailer financials, but it has not managed to score an exclusivity agreement to hold off other buyers and it is not clear if there are any rival suitors.
According to the FT, the acquisition would provide the French powerhouse will an expanded US footprint and provide further exposure to the fast-growing jewellery segment.
Some of the largest deals targeting jewellery makers or clothing and accessories retailers globally have featured the likes of Hermes International, Christian Dior and JD.com, according to Zephyr, the M&A database published by Bureau van Dijk.
A public takeover of Tiffany would rank as one the sector’s largest transaction by value on record.
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