Tiffany & Co. confirmed that it had received an unsolicited nonbinding bid from luxury conglomerate LVMH to buy the company for $120 per share, but said that the two parties are not currently holding any kind of discussions.
Reports of the $14.5 billion cash bid—and its subsequent confirmation by LVMH—sent the retailer’s stock price spiraling upward Monday. At press time, its shares were trading at $129, giving Tiffany a $15.9 billion market capitalization, making it difficult to believe that this this initial bid will be successful. Prior to the bid’s announcement, it was trading at $98 a share.
On CNBC, reporter David Faber noted that Tiffany’s highest all-time share price is $139—which is not too far from where it is now.
He said that LVMH sources told him that “it’s highly unlikely they will go to that number. You never know, of course, but they are using the word discipline a lot.”
He noted that “LVMH has been considering at least a potential purchase of Tiffany for the last two years,” but said it was “highly unlikely” they will attempt a hostile bid.
“LVMH is going to have to wait a little while, to hear and see what it is that Tiffany chooses to do,” he said. “It will be at least a week before Tiffany has any kind of answer or engages in discussions.”
In an 8-K submitted to the Securities and Exchange Commission, the company said, “While the parties are not in discussions, Tiffany’s board of directors…is carefully reviewing the proposal, with the assistance of independent financial and legal advisors, to determine the course of action it believes is in the best interests of the company and its shareholders.”
It added that “Tiffany is successfully executing on its business plan and remains focused on achieving its goal of becoming the next generation luxury jeweler.”
Centerview Partners and Goldman Sachs are serving as financial advisers to Tiffany, and Sullivan & Cromwell is serving as its legal adviser.
Top: Tiffany’s Fifth Avenue flagship (image courtesy of Tiffany & Co.)
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