$14.5 Billion Is the Way to Tiffany’s Heart
Louis Vuitton Moet Hennessy (LVMH) and Tiffany are haggling over the world’s finest jewelry. An offer to buy out the beloved blue-box business was put on the air by LVMH on Sunday: $14.5 billion, in cash, today. But is that a lowball?
It values the jeweler at $120 per share, a large premium to its closing price on Friday, and the reason for its 22% jump on the stock market. However, if the iconic American brand is to be absorbed into LVMH’s high-end portfolio of Bulgari, Christian Dior, Givenchy, and Sephora, it might take more than that. What’s the status of negotiations? Radio silence. Tiffany’s has ghosted the offer, and the onus is on LVMH to sweeten the deal.
Word on the Street is that LVMH is indeed dressing up a fresh proposal. A new offer could value the jeweler at $140 per share, and some investors have risked jumping the gun to get in early before that news becomes official, and the stock jumps again. Savvy!
LVMH is run by Bernard Arnault, a man worth $100 billion. He’s gone to all this trouble because Tiffany has Chinese growth opportunities, unlike many brands in his luxury-goods family. According to analysts, “a takeover would make a lot of sense. The company’s strong brand is a diamond and bridal authority,” and this could be the perfect time to draft an offer.
Lax sales at Tiffany & Co. are heaping pressure on its management team, so Arnault may have caught them with their guard down. The brand is trying to stay classy, advertise to millennials, and revamp stores, all at the same time. Some help from the world’s largest luxury-goods brand would be great, but we await to see if $14.5 billion is the way to Tiffany’s heart!