LVMH boosts offer for Tiffany close to $16bn

The companies began discussions after LVMH offered to pay about $130 per share for Tiffany

French luxury giant LVMH has is said to have raised its initial $14.5 billion offer to take over US jewellers Tiffany. Afp

LVMH and Tiffany & Co have entered talks after the French owner of Louis Vuitton boosted its offer for the US jeweller, according to people familiar with the matter.

The companies began discussions after LVMH offered to pay about $130 (Dh477) per share for Tiffany, said the people, who asked to not be identified because the matter isn’t public. No final decision has been made and talks could fall through.

A representative for LVMH declined to comment. A representative for Tiffany couldn’t immediately be reached.

LVMH offered to buy Tiffany in October in a deal that valued the company at $120 per share, or about $14.5 billion.

Tiffany is reviewing the proposal with advisers to determine what’s in the best interest for shareholders, it said at the time.

Tiffany was expected to reject that offer as too low, as executives believe the company should command a similar earnings multiple to other luxury takeovers such as Bulgari, Bloomberg News previously reported.

Tiffany’s shares fell less than 1 per cent to $123.33 in New York trading Wednesday, giving the company a market value of about $14.9bn.

The deal would expand LVMH’s access to US luxury shoppers, giving it a 182-year-old brand known for its robin’s egg blue boxes. It would also enable LVMH to challenge Cartier owner Richemont for dominance in the global jewelry business.

Tiffany has been working to bounce back under Chief Executive Officer Alessandro Bogliolo, who is cutting back on entry-priced gifting options and revamping its marketing to target younger shoppers. At LVMH, the brand would join a stable that already includes Christian Dior fashion, Bulgari jewelry and Dom Perignon Champagne.