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Report: A Price Cut Could Resurrect LVMH Acquisition of Tiffany

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The troubled $16.2 billion acquisition of Tiffany by global luxury giant LVMH, which has devolved into suits, countersuits and threats, could still be salvaged. Citing unnamed sources close to the negotiations, CNBC reported that the companies are in “indirect conversations” to settle, possibly for a lower purchase price. The deal’s revised terms would price Tiffany stock at $130 to $133 per share, down from the $135 per share that had originally been offered in November 2019.

Like the rest of the luxury retail sector, both companies have been severely affected by COVID-19. The pandemic not only forced store closures but also restricted travel from China, a fast-growing consumer market for luxury goods. The first public sign that LVMH was cooling on the deal came in June 2020, when the company had to publicly refute rumors that it was trying to renegotiate the deal.

LVMH formally pulled out of the deal in September, prompting a lawsuit by Tiffany that sought a Delaware Chancery court’s help in enforcing the terms of the deal. LVMH then threatened its own suit, claiming Tiffany had been mismanaged. Tiffany responded with a motion to expedite its lawsuit against LVMH in mid-September, and the court granted Tiffany’s motion, setting a Jan. 5, 2021 start date for the trial.

The renewed negotiations ahead of this trial date were likely prompted by Tiffany’s recent announcement that it had secured all required regulatory approvals for the acquisition from the European Union, as reported by CNBC. According to Business of Fashion, LVMH’s own move to acquire these regulatory approvals demonstrated that it was acting in good faith.

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