US luxury jewellery house, Tiffany & Co has urged its shareholders “to take no action at this time” pending a board review in relation to an acquisition bid from French luxury conglomerate LVMH Moët Hennessy – Louis Vuitton.
This morning at 8am (Eastern Daylight Time) New York-based Tiffany said that LVMH had made an unsolicited, non-binding cash offer of $120 per share. This values the company at just below US$15 billion. When markets opened, Tiffany’s price surged and after lunch (1.36pm EDT) the stock was hovering at close to US$130 (see chart below) having increased by +24% from Friday’s close of US$98.55.
A statement from the fine jeweller said: “While the parties are not in discussions, Tiffany’s Board of Directors, consistent with its fiduciary responsibilities, is carefully reviewing the proposal with the assistance of independent financial and legal advisors.”
Tiffany, whose heritage goes back to 1837, became a global cultural reference in the 20th century thanks to Truman Capote’s film Breakfast at Tiffany’s starring Audrey Hepburn. The company – which has seen an increasing presence in travel retail airport and cruise locations – has been successfully executing a business plan to become ‘The Next Generation Luxury Jeweller’. Last year, revenues grew strongly by +7% to US$4.4 billion.
Acting for Tiffany as financial advisors are Centerview Partners and Goldman Sachs with Sullivan & Cromwell the legal advisor.
LVMH had revenues of €46.8 billion in 2018 and strong growth so far this year. Sales derive from 75 prestigious brands in its portfolio and a retail network of more than 4,590 stores worldwide including travel retail. With Tiffany onboard, the company would become a €50 billion entity.
LVMH’s brands, aside of those forming the company name, include Bulgari (the group’s last major multi-billion dollar jewellery acquisition), Christian Dior, Givenchy, Guerlain, Marc Jacobs and Tag Heuer, as well as the travel retailers DFS Group and Starboard Cruise Services. Individual brands and companies are grouped into five main divisions: Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics, Watches & Jewellery and Selective Retailing.
