LVMH Will Buy Tiffany & Co. At A Reduced Price

LVMH Will Buy Tiffany & Co. At A Reduced Price
LVMH Will Buy Tiffany & Co. At A Reduced Price

Video: LVMH Will Buy Tiffany & Co. At A Reduced Price

Video: LVMH to buy Tiffany for $16.2 billion 2022, November

According to the Financial Times, citing knowledgeable sources, the French side of the deal intends to end the "fierce conflict" that arose during the merger of Tiffany & Co. and LVMH due to the COVID-19 pandemic and difficulties obtaining approvals from antitrust authorities.

LVMH announced Thursday it will pay $ 131.50 per share for the jewelry brand, up from its original $ 135. The deal will amount to $ 15.8 billion. In addition, Tiffany will have to pay dividends to its shareholders in the amount of $ 0.58 per share.

In a joint statement, the two companies said they would settle their claims in a Delaware court in September. Thereafter, the boards of directors of the two groups approved the revised terms. Global means LVMH Chairman and CEO Bernard Arnault will save about $ 425 million on purchase.

The outcome of the conflict also shows that Arnault, who has a reputation as a fierce negotiator, did not actually plan to abandon the deal, but allowed lawyers to distort Tiffany's financial results in documents to promote the idea of ​​"insolvency" of the future of the company, marred by the outbreak of coronavirus. Now, France's richest man has changed his mind: “We are more confident than ever in the enormous potential of the Tiffany brand and believe LVMH is the right home for Tiffany and its employees during this exciting next chapter,” Arnault said in a statement.

Tiffany Chairman Roger Farah responded that the board has concluded that the compromise is "in the best interest of all stakeholders to ensure that the deal is closed."

“We are very pleased to have reached an attractive price agreement with LVMH and can now proceed with the merger,” he added.

The deal, signed a year ago, nearly fell through in September, when LVMH announced embarrassment over rising trade tensions between France and the United States. Prior to that, Arnault had made several attempts to lower the price of the deal, arguing that the pandemic had fundamentally changed the value of Tiffany.

In response, the jewelry brand filed a lawsuit to force the conglomerate to complete the deal on the original terms. Analysts have wondered why LVMH has unleashed a conflict with Tiffany over the relatively small price cut. "If the information is confirmed, the size of the price cut will look odd," said Jefferies analyst Flavio Sereda in a comment to FT. "It is unclear why LVMH and their lawyers have continued to insist on minimal price cuts from the original terms since early September."

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