US/France: Tiffany to reject LVMH’s $14.5bn bid: FT

Tiffany is expected to rebuff an unsolicited $14.5bn takeover approach from French luxury group LVMH, with the US jeweler believing the offer undervalues the company, according to the FT.

Tiffany’s advisers were on Sunday still assessing the surprise indicative offer from Bernard Arnault’s LVMH, the world’s largest luxury group by sales, with the board set to consider the next move. The all-cash offer came earlier this month and was pitched at about $120 per Tiffany share, a premium of about 30 per cent to Tiffany’s share price at the time.

“LVMH is the best luxury goods company in the world and has had huge success with Bulgari,” John Armitage, chief investment officer of London-based Egerton, a hedge fund that is the sixth-biggest shareholder in Tiffany, told the Financial Times.

“As Tiffany shareholders, we would like the value of a great brand and company maximised.” Other large shareholders in Tiffany include Qatar Holding, an arm of the country’s sovereign wealth fund. Over the past four decades Mr Arnault, Europe’s richest person, has built LVMH from a near-bankrupt French textile company to the world’s largest luxury group by revenues. Its brands include Dior, Louis Vuitton and Sephora.

A tie-up between LVMH and Tiffany would mark one of the French group’s largest acquisitions and strengthen its position in jewellery, adding to its $5.2bn purchase of Italian jeweller Bulgari in 2011.

Full Content: Financial Times

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