Tiffany & Co’s board approved an agreement to revive its sale to LVMH, people familiar with the matter said, giving the French luxury conglomerate a US$425 million discount from the original price.
The Paris-based company would pay US$131.50 per share for the US jeweler, down from the original US$135, the people said.
The total cost of the original agreement was about US$16 billion.
Photo: Reuters
Tiffany sought about US$132 per share as a compromise price, Bloomberg News reported on Tuesday, citing people familiar with the matter.
The jeweler also likely wanted a guarantee that LVMH would not back out of any revised deal, after the Louis Vuitton owner said last month that it could not complete the acquisition because of a French government request.
Tiffany shares on Wednesday erased losses, rising 0.8 percent to US$129.95 in New York trading.
Representatives for the jeweler and LVMH declined to comment.
The compromise ends a year-long saga involving a bitter war of words, French government intervention and lawsuits in the US.
By striking a new deal, the companies can avoid a courtroom battle that was set for January in Delaware, but the original deal’s closing date of Nov. 24 is not to be met, a person familiar with the matter said.
The relationship between Tiffany and LVMH started affably last year following a short courtship, with the jeweler hosting LVMH chairman Bernard Arnault and his top brass at its New York flagship store.
France’s wealthiest man spoke of Tiffany as an American icon and expressed his “intense respect and admiration” for the business.
The smiles soon faded after the COVID-19 pandemic sparked worldwide economic turmoil and roiled the global luxury market. LVMH got a helping hand from the French government when its foreign minister sent a letter asking the company to delay the deal amid a trade dispute with the US.
That sparked a Tiffany lawsuit, followed by an LVMH countersuit in which it accused the jeweler’s executives of mismanaging the business during the pandemic.
Tiffany persuaded a judge to fast-track its suit and the two sides reopened talks as the original closing date approached.
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