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LVMH lowers price for Tiffany & Co. takeover to US$15.8bn

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LVMH and Tiffany & Co. (NYSE:TIF) have finally agreed on a takeover price for one of the most contentious acquisitions seen this year.

The French luxury giant will buy the US jeweller for US$131.5 per share, instead of the US$135 originally agreed last November, setting the final price to US$15.8bn.

READ: LVMH says ‘non’ to Tiffany merger and luxury handbags start to fly

It is a discount of US$425mln for the company, which decided to walk out of the deal last month in the light of the COVID-19 pandemic, citing a request from France’s Foreign Affairs Ministry to delay the deal due to a US plan to impose tariffs on French and European goods.

Tiffany’s then sued the divorcee in a US court, demanding to conclude the deal, with the case scheduled for hearing in January.

But the Bulgari and Louis Vuitton owner may have settled for a lower acquisition price to avoid costly court fees, Reuters reported.

Analysts at Hargreaves Lansdown noted that the price, despite the relatively modest discount, is “still be a lot to pay if LVMH’s prior assessment of Tiffany’s ‘dire’ prospects were correct and so far there has been a pretty muted response from shareholders.”

“Although LVMH still has an unrivalled wardrobe of brands and a loyal customer base, the collapse of the international travel market continues to depress sales and with any benefit of the Tiffany acquisition uncertain for now, the group is still in a state of flux.”

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