Bloomberg reported that Tiffany sought around US$132 per share as a compromise price, citing people familiar with the matter. The jeweller also likely wanted a guarantee that LVMH wouldn’t back out of any revised deal, after the Louis Vuitton owner said in September it could not complete the acquisition because of a French government request.
Tiffany shares erased losses on October 28, rising 0.8 per cent to US$129.95 in New York. Representatives for the jeweller and LVMH declined to comment the following day.
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The compromise ends a year-long saga involving a bitter war of words, French government intervention and lawsuits in the US. By striking a new deal, the companies can avoid a courtroom battle that was set for January 2021 in Delaware.
However, the original deal’s closing date of November 24 would not be met, according to a person familiar with the matter.
Adding Tiffany will give LVMH’s billionaire chairman Bernard Arnault a major boost in the global jewellery market, allowing the billionaire to challenge Cartier owner Richemont for supremacy as the luxury industry begins to recover from a turbulent 2020. At LVMH, Tiffany would join a portfolio of high-end brands that include Dior, Givenchy and Bulgari.Jack Ma vs Mukesh Ambani – who’s the richest man in Asia now?
The relationship between Tiffany and LVMH started affably last year following a short courtship, with the jeweller hosting Arnault and his top brass at its New York flagship store. France’s wealthiest man spoke of Tiffany as an American icon and expressed his “intense respect and admiration” for the business.
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The smiles faded soon after the coronavirus pandemic sparked worldwide economic turmoil and roiled the global luxury market. LVMH got a helping hand from the French government when its foreign minister sent a letter asking the company to delay the deal amid a trade dispute with the US.
That sparked a Tiffany lawsuit, followed by an LVMH countersuit in which it accused the jeweller’s executives of mismanaging the business during the pandemic.
Tiffany persuaded a judge to fast-track its suit and the two sides reopened talks as the original closing date approached.
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