According to multiple media reports, LVMH approached Tiffany & Co. with a $US14.5 billion takeover proposal.
LVMH later released a statement confirming “preliminary discussions regarding a possible transaction” had taken place, however the details of the deal were not addressed. The company’s management added, “There can be no assurance that these discussions will result in any agreement.”
Tiffany & Co. management later released a statement confirming the board of directors had received an “unsolicited, non-binding proposal to acquire Tiffany for $US120 per share in cash”, which is consistent with the $US14.5 billion figure.
While Tiffany & Co. stated that the proposal would be reviewed “with the assistance of independent financial and legal advisors”, the Financial Times reports that the offer is likely to be rejected as undervalued.
The 183-year-old company’s annual sales were $US4.4 billion in 2018, with 92 per cent coming from the sale of jewellery. It has more than 320 stores worldwide and recently announced plans to expand into India.
However, despite positive year on year sales growth of 7 per cent, and net earnings of $US586 million – an increase of 13 per cent from 2017 – both sales and earnings declined in the first half of 2019, led by weak results in North America, Europe and Hong Kong.
LVMH is best known for being the parent company of fashion houses Christian Dior, Givenchy, Marc Jacobs and Louis Vuitton.
It currently owns three jewellery businesses – Bulgari, Chaumet and Fred – and watch brands Hublot, TAG Heuer and Zenith.
Tiffany & Co.’s current CEO, Alessandro Bogliolo, was previously CEO of Bulgari and another former Bulgari executive, Francesco Trapani, sits on the Tiffany & Co board.
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