LVMH in talks to buy jeweller Tiffany

Bloomberg October 28 | Updated on October 28, 2019

The logo of US jeweller Tiffany & Co   -  REUTERS

French luxury giant has offered $14.5-billion proposal to buy US jeweller

LVMH said it has held discussions with jeweller Tiffany & Co on a deal that would expand the Louis Vuitton owners reach into the luxury business and could be Chairman Bernard Arnault’s biggest ever takeover.

The French luxury conglomerate confirmed the talks after Bloomberg reported earlier that LVMH has offered about $14.5 billion, or $120 a share, which would be 22 per cent more than the Oct. 25 closing price.

There’s no assurance that the discussions, described as preliminary, will result in any agreement, LVMH said in a statement on Monday.

A deal for the jeweller would expand the French company’s access to US luxury shoppers, giving it an iconic, 182-year-old brand known for its robins egg blue boxes and its role as a favourite haunt of Holly Golightly in Truman Capotes Breakfast at Tiffany’s. Adding the brand to a stable that includes the Bulgari jewel and watch label, Christian Dior fashions, Hublot watches and Dom Perignon Champagne could help LVMH compete against Cartier owner Richemont SA.

“Jewellery is one of few segments of the luxury sector where LVMH is not the leader, and we know Arnault likes to be always No. 1,” RBC analyst Rogerio Fujimori said in a note. “Tiffany would become a better company and stronger competitor under the ownership of LVMH.”

Tiffany is expected to reject the offer as undervalued, the Financial Times reported, citing people familiar with the matter. A representative for the jeweller declined to comment.

Stronger competitor

A fair valuation of the jeweller would be about $160 a share or higher, according to Cowen & Co. analyst Oliver Chen. He wrote in a note on Sunday that Tiffany’s strategic positioning as a gifting authority, brand DNA as a diamond and bridal authority, are leading qualities and deserve an exceptional premium.

Published on October 28, 2019

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