Tiffany & Co shares plunged after Women’s Wear Daily reported LVMH Moet Hennessy Louis Vuitton SE’s deal to buy the luxury jewelry company is uncertain as the US economy faces widespread upheaval.
LVMH board members arranged to meet on Tuesday to discuss the proposed deal, the trade journal said, citing unidentified individuals.
Board members are concerned about the COVID-19 pandemic, which has disrupted the US economy, and growing unrest over police violence, it said.
Photo: AP
They also expressed concern about Tiffany’s ability to cover its debt covenants at the end of the transaction, it added.
Tiffany representatives did not immediately respond to a request for comment. LVMH declined to comment.
The French company’s shares rose 0.8 percent in early trading in Paris yesterday.
Tiffany shares, which were halted for several minutes due to volatility, on Tuesday fell as much as 13 percent, the steepest intraday drop since 2015, before closing down 8.9 percent.
“I would imagine it is normal that LVMH internally discusses the proposed Tiffany acquisition — given the size of the deal, the COVID-19 situation and the recent social unrest in the US,” Sanford C. Bernstein analyst Luca Solca wrote. “Having said that, the Tiffany takeover would provide a unique strategic opportunity to LVMH, boosting its position in branded jewelry.”
It is an “open question” whether LVMH would try to renegotiate better terms, Solca said.
The economic fallout from the pandemic has disrupted or derailed a number of prominent deals, including L Brands Inc’s agreement to sell a majority stake in Victoria’s Secret to private equity firm Sycamore Partners.
If the LVMH-Tiffany tie-up falls apart, it would be one of the largest related to COVID-19.
The New York-based jeweler’s Web site said that as of Monday, its stores are temporarily closed until further notice.
The pandemic has also affected the company’s ability to offer next-day and express shipping.
The stores went dark in mid-March due to a pandemic lockdown. Some of its locations have had their windows boarded up as protests roil cities across the country.
LVMH’s planned purchase of Tiffany for more than US$16 billion has been the subject of speculation after the pandemic suddenly altered the consumer landscape worldwide.
Prior to the lockdown, 183-year-old Tiffany was struggling with a lull in international tourist traffic and civil unrest in Hong Kong. In the US, management has worked to attract younger clientele, although sales have been slow to rebound.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week recorded an increase in the number of shareholders to the highest in almost eight months, despite its share price falling 3.38 percent from the previous week, Taiwan Stock Exchange data released on Saturday showed. As of Friday, TSMC had 1.88 million shareholders, the most since the week of April 25 and an increase of 31,870 from the previous week, the data showed. The number of shareholders jumped despite a drop of NT$50 (US$1.59), or 3.38 percent, in TSMC’s share price from a week earlier to NT$1,430, as investors took profits from their earlier gains
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
CHINA RIVAL: The chips are positioned to compete with Nvidia’s Hopper and Blackwell products and would enable clusters connecting more than 100,000 chips Moore Threads Technology Co (摩爾線程) introduced a new generation of chips aimed at reducing artificial intelligence (AI) developers’ dependence on Nvidia Corp’s hardware, just weeks after pulling off one of the most successful Chinese initial public offerings (IPOs) in years. “These products will significantly enhance world-class computing speed and capabilities that all developers aspire to,” Moore Threads CEO Zhang Jianzhong (張建中), a former Nvidia executive, said on Saturday at a company event in Beijing. “We hope they can meet the needs of more developers in China so that you no longer need to wait for advanced foreign products.” Chinese chipmakers are in
POLICY REVERSAL: The decision to allow sales of Nvidia’s H200 chips to China came after years of tightening controls and has drawn objections among some Republicans US House Republicans are calling for arms-sale-style congressional oversight of artificial intelligence (AI) chip exports as US President Donald Trump’s administration moves to approve licenses for Nvidia Corp to ship its H200 processor to China. US Representative Brian Mast, the Republican chairman of the US House Committee on Foreign Affairs, which oversees export controls, on Friday introduced a bill dubbed the AI Overwatch Act that would require the US Congress to be notified of AI chips sales to adversaries. Any processors equal to or higher in capabilities than Nvidia’s H20 would be subject to oversight, the draft bill says. Lawmakers would have
RSS