After nearly a year of false starts, lawsuits and accusations of bad faith and mismanagement, a cut in the purchase price has finally cemented the LVMH purchase of Tiffany & Co. The original offer of $135 per share, or $16.2 billion, has been lowered to $131.50 per share for a total of approximately $15.8 billion.
On Oct. 27, CNBC had reported that indirect discussions about lowering the purchase price could resurrect the deal, which had originally been announced in November 2019. Since then, COVID-19’s negative impact on the luxury market and on retail in general gave prospective purchaser LVMH cold feet, leading to its September pullout and nearly two months of legal wrangling. The new deal includes an agreement by both parties to settle their outstanding litigation in Delaware Chancery Court.
“We are very pleased to have reached an agreement with LVMH at an attractive price and to now be able to proceed with the merger,” said Roger Farah, Chairman of the Board of Directors of Tiffany in a statement. “The board concluded it was in the best interests of all of our stakeholders to achieve certainty of closing.”
Bernard Arnault, President and CEO of LVMH, said in a statement that “this balanced agreement with Tiffany’s board allows LVMH to work on the Tiffany acquisition with confidence and resume discussions with Tiffany’s management on the integration details. We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter.”
Both companies’ boards have approved the transaction, and all required regulatory approvals have been obtained. The agreement provides that Tiffany will pay its scheduled quarterly dividend of $0.58 per share on Nov. 19, 2020. The merger is expected to close early in 2021, subject to Tiffany shareholder approval and customary closing conditions.