The company rejected the French conglomerate’s previous $US14.5 billion acquisition proposal, which was presented to the board in October. That deal valued Tiffany & Co. at $US120 per share, while the new deal increases the valuation to $US135 per share.
At the time of publication, Tiffany & Co. was trading at $US125.51.
According to recent news reports, if accepted, the deal would be the largest in LVMH’s history, including its $US13.1 billion acquisition of luxury fashion house Christian Dior in 2017. Its most expensive jewellery acquisition to date is Italian brand Bulgari, which it bought for $US5.2 billion in 2011.
Tiffany & Co. currently operates more than 320 stores worldwide. Its annual sales were $US4.4 billion ($AU6.4 billion) in 2018, with 92 per cent coming from the sale of jewellery.
However, its most recent quarterly earnings report noted sales had decreased in its largest market – the US – as well as Asia-Pacific (including China) and Europe.
When asked whether Tiffany & Co. would benefit from being part of a luxury conglomerate, CEO Alessandro Bogliolo – who previously held an executive position at Bulgari – would not be drawn.
“When you talk about big luxury brands, some of them are extremely successful, and are part of big groups; consider [Louis] Vuitton, consider Cartier. But you have other brands that are super brands, super powerful, that are not part of big groups; consider Chanel, consider Hermès. I don’t think there is a magic formula,” he said.
LVMH’s annual revenue for 2018 was €46.8 billion ($AU75.3 billion); the acquisition of Tiffany & Co. would more than double LVMH’s revenue in the watches and jewellery category.
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