Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Tiffany and LVMH could patch things up with cut-price deal

Published 10/27/2020, 11:02 AM
Updated 10/27/2020, 01:15 PM
© Reuters. Tiffany & Co. logo outside a store in Paris

By Greg Roumeliotis

NEW YORK (Reuters) - U.S. jeweler Tiffany & Co and French luxury goods giant LVMH are in talks to settle their dispute over a $16 billion takeover at a price slightly lower than that initially agreed, sources familiar with the matter said on Tuesday.

The negotiations were based on a price in the range of $131-$134 for each Tiffany share, against the $135 price when the deal was first agreed last November.

An agreement at the bottom of that range would save LVMH, led by billionaire businessman Bernard Arnault, about $480 million on the initial $16.2 billion purchase price.

The initial deal ran into trouble last month when the French group said it could no longer complete the transaction by the Nov. 24 deadline.

It cited a French political intervention preventing it from doing so, but also what it described as the jeweller's "dismal" performance during the coronavirus crisis.

The two sides are facing off in a Delaware court, with Tiffany seeking to force LVMH to honour the deal. The case is due to be heard in early January.

CNBC earlier reported that the two parties were in indirect talks to settle the dispute.

Both LVMH and Tiffany did not immediately respond to Reuters requests for comment.

Tiffany shares rose almost 5% to $128.78 on Tuesday after reports of a potential end to the dispute.

Louis Vuitton owner LVMH agreed last year to buy Tiffany in its biggest acquisition yet, betting it could restore the U.S. jeweller's lustre by investing in stores and new collections.

The deal was designed to boost LVMH's smallest business, the jewellery and watch division that is already home to Bulgari and Tag Heuer, help it to expand in one of the fastest-growing industry sections and strengthen its U.S. presence.

New York-based Tiffany, founded in 1837 and known for its signature pale blue boxes, retains a resonance as the go-to purveyor of engagement rings that only a handful of rivals can match.

Tiffany also said on Monday that it had received the nod from the European Commission for the deal's completion, thus clearing all regulatory hurdles.

© Reuters. FILE PHOTO: A Tiffany & Co. store is pictured in the Manhattan borough of New York City

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.