The original Merger Agreement, which was inked on 24 November 2019, will be modified with a lower purchase price – $US131.50 per share, totalling $US15.8 billion, reduced from $US135 per share, or $US16.2 billion – and revised closing conditions.
Roger N Farah, chairman of the board of directors, Tiffany & Co., said, “We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger. The board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing.”
At the time of publication, Tiffany & Co. shares were trading at $US130.81, an increase of more than 6 per cent compared with 26 October.
Bernard Arnault, president and CEO LVMH, added, “This balanced agreement with Tiffany’s board allows LVMH to work on the Tiffany acquisition with confidence and resume discussions with Tiffany’s management on the integration details. We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter.”
It is an abrupt about-face for LVMH, which excoriated Tiffany & Co. management over its handling of the COVID-19 crisis after withdrawing from the merger in September.
A particular target of criticism was the payment of dividends to Tiffany & Co. shareholders during the first wave of the pandemic – something Tiffany & Co. argued was justified due to historical precedent, having never missed or reduced a dividend payment since 1987.
Notably, under the terms of the revised Merger Agreement, Tiffany & Co. will be allowed to pay its regular quarterly dividend to shareholders on 19 November.
While all international regulatory approvals have now been obtained, the new deal is still subject to the approval of Tiffany & Co. shareholders.
More reading:
TIMELINE: Inside the Tiffany & Co. and LVMH merger
Tiffany & Co. board approves new $15.8 billion LVMH offer: report
LVMH files countersuit against Tiffany & Co.; trial date set
LVMH and Tiffany & Co. deal collapses; court battle looms