LVMH sets its eyes on Tiffany
LVMH wants to grow its fine jewelry segment. Following the purchase of Bulgari in 2011, the French luxury group has now set its eyes on Tiffany, which operates about 300 stores worldwide.
At $120 per share, the current bid values Tiffany (which reported revenues of $4.44 billion in 2018) at $14.5 billion, which would make it LVMH’s largest acquisition to date.
The bid is still under the 2018 high of $139.50, though, leaving Tiffany shareholders unimpressed as experts value the shares at $140-$160.
Negotiations between the two groups are currently “stalled,” said a source close to the case on condition of anonymity. It is not excluded however that they resume their language in the coming weeks.
Both parties disagree on the right price. Tiffany wants LVMH, chaired by billionaire Bernard Arnault, to raise its offer.
What is not willing to do for the moment the French group that would see, in case of merger, its growth boosted in the United States, its second market after Asia.
LVMH, which already had Tiffany in its sights before it took over Bulgari for $€4.3 billion in 2011, confirmed that it had entered into preliminary talks with Tiffany, but emphasizes that there is no guarantee that the discussions will lead to an agreement. In 2012, takeover discussions were abandoned because Tiffany had just granted a watch license to the Swiss watch maker Swatch. A Tiffany deal would potentially double the size and profitability of LVMH’s hard luxury business, making the €46.8 billion company (2018) an unrivaled luxury superpower.