Oct 28, 2019
LVMH eyes possible Tiffany & Co. takeover
LVMH confirmed Monday that it has approached Tiffany & Co. about a possible takeover.
Why it matters: This is as much about trade war opportunism as it is about diamond bracelets in little blue boxes. Tiffany has been hit hard by a decrease in Chinese tourism to the U.S., and it has been trying to play catch-up by opening more locations in China. It has also assumed the added costs of new Chinese tariffs on U.S.-made jewelry.
- Pricing remains unclear, although reports are that LVMH is contemplating a $120 per share bid that would value Tiffany at around $14.5 billion.
- That would be a 22% premium to where Tiffany closed on Friday, but traders expect a richer bid — with shares climbing past $130 at today's open.
- Tiffany's all-time high was $137.56, back in July 2018.
The bottom line: LVMH is synonymous with luxury, and it would use Tiffany to bolster a relatively small jewelry business whose current crown jewel is Bulgari.