Bernard Arnault, LVMH

French Luxury group LVMH pounces on Tiffany with a $14.5bn takeover bid


Bernard Arnault, LVMH
Bernard Arnault, LVMH

Tiffany is expected to rebuff an unsolicited $14.5bn takeover approach from Bernard Arnault’s French luxury group LVMH.

Tiffany’s adviser were yesterday still examining the surprise indicative offer from LVMH, the world’s largest luxury group by sales.

The all-cash offer came earlier this month which pitches Tiffany shares at $120 per share at that time. Shares have since rallied, and the offer today stands at a 22 per cent premium of 30 per cent to Tiffany’s share price at $139.50 per share.

Tiffany has been hit by challenges including lower tourist spending, a strong US Dollar and a trade war between US and China.

However, Egerton Capital, a hedge fund, and sixth largest shareholder with a 39 per cent stake welcomed the approach, but other large shareholder Quatar Holding, an arm of the country’s sovereign wealth fund is considering it..

LVMH has had huge success with Bulgari after a $5.2bn  purchase. Mr Arnault, Europe’s richest person, has built the company from a near bankrupt French textile firm into the largest luxury group by revenues. Its brands spans Louis Vuitton, Dior and Sephora. LVMH’s main rival is Johann Rupert’s Richemont which owns Cartier and Van Cleef.

Tiffany attempted to focus further upmarket under CEO Alessandro Bogliolo, a former executive at Bulgari.

Donald Trump and Mr Arnault and other members of LVMH management to inaugurate  a new $50m investment Louis Vuitton workshop employing 1000 jobs. The appearance prompted #boycottlouisvuitton online.