LVMH Makes $14.5B Takeover Offer For Tiffany & Co.

With jewelry as one of the fastest-growing businesses in the luxury sector, Tiffany & Co. has received an offer from LVMH Moët Hennessy Louis Vuitton. The French firm sent the company’s officials a letter that reportedly outlined an all-cash, $120-per-share takeover bid that would value the firm at nearly $14.5 billion, The Wall Street Journal reported.

The purchase of Tiffany would grow LVMH’s jewelry exposure. Last year, the global jewelry market increased 7 percent and was worth approximately €18 billion. Tiffany is said to be one of the biggest jewelers in the world, alongside LVMH-owned Bulgari and Cartier, although it has not been able to keep up with European competitors, per the paper.

Tiffany has approximately $4 billion in annual revenue, yet it has reportedly grappled with less-than-stellar sales growth for years.

The company is expected to work on a response quickly. The bid represents a premium of 30 percent or more over where the firm traded at the time the offer was presented, per an unnamed source. However, LVMH “is expected to have to pay up even more if it wants to clinch the deal,” per the report.

Tiffany’s shares closed at $98.55 on Friday, with a market value of almost $12 billion. The company’s stock reached almost $140 per share during the summer of 2018.

News surfaced earlier in the day that Tiffany planned to rebuff LVMH’s unsolicited $14.5 billion takeover approach, with the jeweler believing the offer undervalues the firm. However, Tiffany’s shares have been slimmed by challenges such as a U.S.-China trade war, lower tourist spending and a strong U.S. dollar.

And Egerton Chief Investment Officer John Armitage said, according to the report, “LVMH is the best luxury goods company in the world and has had huge success with Bulgari. As Tiffany shareholders, we would like the value of a great brand and company maximized.”