LVMH confirms Tiffany approach in largest bid in company’s history
The French multinational behind brands such as Louis Vuitton, Dior and Moët & Chandon today confirmed it had approached Tiffany & Co about a possible takeover of the U.S. jeweller.
In a statement, LVMH, which is the world’s largest luxury goods group, said: “In light of recent market rumours, LVMH Group confirms it has held preliminary discussions regarding a possible transaction with Tiffany. There can be no assurance that these discussions will result in any agreement.”
Read more: LVMH sparkles with €37bn Bulgari purchase
A source close to the potential deal said that LVMH had offered a bid valuing Tiffany at $120 (£93.52) per share, equivalent to an acquisition offer of $14.5bn.
This would make the purchase the largest in LVMH’s history. Shares in Tiffany rose nearly 30 per cent today, to $1.29.
“Tiffany is potentially the biggest prey and the only U.S. global luxury brand,” analysts at Jefferies said.
The deal would bolster LVMH’s hard luxury division, which includes Bulgari jewellery, Hublot and Tag Heuer watches.
Tiffany, which has been damaged by the US-China trade dispute by reduced spending by Chinese consumers in US shopping hubs, is said to have hired advisers to review the offer.
Its sales have suffered in recent quarters as it has been forced to push deeper into the mainland Chinese market to keep up with growing spending at home.
Analysts at Cowen said: “LVMH has ample financial capacity for a deal and we also expect many strategic and financial synergies.”
Jewellery has become an increasingly competitive part of the luxury goods market, as companies try to capitalise on rapid growth.
Read more: LVMH sales up in luxury bounce back
Fellow French group Kering, which owns Alexander McQueen, Yves Saint Laurent and Balenciaga, has also made similar moves by launching a luxury jewellery range at its Gucci brand.
Another source said that French group had submitted a preliminary, non-binding offer to Tiffany earlier this month.