Bloomberg earlier reported on LVMH's interest in Tiffany. PARIS—French luxury-goods titan Bernard Arnault is reviewing his $16 billion deal to buy U.S. jeweler Tiffany & Co., according to a person familiar with the matter, after the coronavirus pandemic upended the industry.
Write to Matthew Dalton at Matthew.Dalton@wsj.com . LVMH has a market value of EUR193 billion ($214 billion). Luxury-goods companies have been pressured by fears of an economic slowdown in China, where shoppers account for roughly one-third of luxury-goods purchases world-wide. The outbreak of protests last week against police violence in the U.S., in which some high-end shopping areas were hit by looting and vandalism, has only given Mr. Arnault more reason to question the transaction, analysts say. Tiffany shares have fallen well below LVMH's $135 offer price since the pandemic hit.
0. Shares of New York-based Tiffany closed Friday at $98.55, giving it a market value of nearly $12 billion. Write to Matthew Dalton at Matthew.Dalton@wsj.com
Revenue jumped in its latest quarter, showing little impact from the Hong Kong protests or the U.S.-China trade tensions.
Breaching the covenants could give LVMH legal arguments to walk away from the deal.
10/28/2019 | 01:48am EDT *: *: * By Ben Dummett and Suzanne Kapner . LVMH could use its deep pockets to develop product lines where Tiffany is weak.
"Tiffany has yet to express its full potential -- for example in design jewelry and watches," says Bernstein & Co. analyst Luca Solca. Tiffany & Co. has received a takeover approach from LVMH Moët Hennessy Louis Vuitton, which is seeking to add the iconic U.S. jeweler to its portfolio of upscale brands. Tiffany, which has about $4 billion in annual revenue, has struggled with lackluster sales growth for years. "If they want to walk out, they go to court," said Bernstein luxury-goods analyst Luca Solca. Tiffany Receives Offer From LVMH -- WSJ. The deal gives LVMH a classic American brand that has struggled with weak demand at home and abroad. That would value Tiffany at close to $14.5 billion. 11/25/2019 | 02:48am EDT *: *: * By Ben Dummett in London, Suzanne Kapner in New York and Matthew Dalton in Paris .
One lever available to him would be the risk of Tiffany breaching its bond covenants, under which the company's ratio of debt to earnings must stay below certain thresholds.
carol.ryan@wsj.com Oct. 28, 2019 8:40 am ET Louis Vuitton’s owner will be marrying down in any union with jeweler Tiffany & Co., but a relatively cheap valuation makes the tie-up more appealing.
The acquisition gives LVMH scale in a business that has been one of the luxury industry's fastest-growing sectors. Months later, the emergence of the coronavirus sent the luxury-goods market plummeting.
0. Tiffany is one of the three largest luxury-jewelry brands, along with Cartier, owned by Cie. Financière Richemont, and Bulgari, owned by LVMH. Write to Ben Dummett at ben.dummett@wsj.com and Suzanne Kapner at Suzanne.Kapner@wsj.com
Tourist shoppers, the industry's lifeblood, have been forbidden from traveling, depriving boutiques of their most lucrative customers. Analysts have asked LVMH executives whether the company would consider buying them at a discount. Mr. Arnault has had his eye on Tiffany for years, and the deal is a key part of his strategic vision for LVMH. The 182-year-old brand has been trying to rebuild its business after ousting its chief executive two years ago amid pressure from an activist investor.
Under CEO Alessandro Bogliolo, the jeweler has pushed an expansion into China, with plans to open flagship stores in several major cities.
It sells jewelry in robin-egg-blue boxes in more than 320 boutiques world-wide. The merger agreement allowed LVMH to buy Tiffany shares starting in mid-May. The stock reached nearly $140 a share during the summer of 2018. LVMH Reviews Tiffany Deal Amid Coronavirus, Riots Luxury giant is likely looking to renegotiate the price it is paying for Tiffany, analysts say, as the sector faces a prolonged slump The board "notably focused its attention on the development of the pandemic and its potential impact on the results and perspectives of Tiffany & Co.," LVMH said Thursday. The companies have already had the merger approved by U.S. regulators and are preparing to submit the deal to the European Commission, the European Union's merger regulator. Analysts expect revenue to have fallen around 50%.
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