By Ted M. Brooks
LVMH, the luxury brand that owns Louis Vuitton, Moët and Hennessy, wants to buy more than just jewelry – it wants to buy jewelry retailer Tiffany & Co.
LVMH has reportedly put out an offer of $14.5 billion. If successful, it would, according to reports, prove to be company chairman Bernard Arnault’s largest takeover, and open more of the American market to the Louis Vuitton brand.
Tiffany execs said in a release that it had received an unsolicited, non-binding proposal from LVMH Moet Hennessy – Louis Vuitton to acquire Tiffany for $120 per share in cash.
“While the parties are not in discussions, Tiffany’s Board of Directors, consistent with its fiduciary responsibilities, is carefully reviewing the proposal, with the assistance of independent financial and legal advisors, to determine the course of action it believes is in the best interests of the Company and its shareholders,” the release said. “Tiffany shareholders need take no action at this time.”
Tiffany is successfully executing on its business plan and remains focused on achieving its goal of becoming The Next Generation Luxury Jeweler. Centerview Partners and Goldman Sachs are serving as financial advisors to Tiffany and Sullivan & Cromwell is serving as Tiffany’s legal advisor.
With more than 14,000 employees, Tiffany & Co. and its subsidiaries design, manufacture and market jewelry, watches and luxury accessories – including more than 5,000 skilled artisans who cut diamonds and craft jewelry in the company’s workshops, realizing its commitment to superlative quality, according to the company. It operates more than 300 retail stores worldwide as part of its omni-channel approach.
“The jeweler advised shareholders to take no action, saying its board is reviewing the offer. The price would be 22% more than the Oct. 25 closing price. Tiffany shares surged to $127.20 in U.S. premarket trading Monday,” according to Crain’s New York Business.
A deal for the jeweler “would expand the French company’s access to U.S. luxury shoppers, giving it an iconic, 182-year-old brand known for its robin’s egg blue boxes and its role as a favorite haunt of Holly Golightly in Truman Capote’s “Breakfast at Tiffany’s,” Crain’s noted. “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.”
According to the Financial Times, Tiffany “is set to reject the offer, which is all cash, with the report saying the offer was too low, according to people familiar with the matter,” reported businessinsider.com. “LVMH and Tiffany have had differing experiences in the last year, both being heavily affected by the Hong Kong protests.
Louis Vuitton, reported its third-quarter earnings earlier this month, boasting better than expected sales despite the disruption, with overall revenue rising 16% in the first nine months of the year.”
