French luxury group LVMH in £11bn offer for iconic jeweller Tiffany & Co

The jeweller starred in Audrey Hepburn classic Breakfast at Tiffanys. Picture: Ronald Grant Archive.
The jeweller starred in Audrey Hepburn classic Breakfast at Tiffanys. Picture: Ronald Grant Archive.
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US jeweller Tiffany & Co has confirmed that it has received an unsolicited $14.5 billion (£11.3bn) bid from Glenmorangie owner LVMH.

The offer, at $120 a share in cash, would add another household name to the French luxury group’s plethora of upscale brands.

The group – Moët Hennessy Louis Vuitton – owns fashion names such as Christian Dior, Fendi, and Givenchy as well as watchmaker Tag Heuer.

It comes as Tiffany, which is trying to transform its brand to appeal to younger shoppers, is seen as well-placed to join forces with a company with deep pockets to help expand its business.

The deal would give LVMH a much broader foothold in the United States and widen its offerings in jewellery.

LVMH said: “In light of recent market rumours, the LVMH Group confirms that it has held preliminary discussions regarding a possible transaction with Tiffany.

“There can be no assurance that these discussions will result in any agreement.”

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Tiffany & Co – which is led by chief executive Alessandro Bogliolo – confirmed that it had received the “unsolicited, non-binding” proposal.

The jewellery firm added: “While the parties are not in discussions, Tiffany’s board of directors, consistent with its fiduciary responsibilities, 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.

“Tiffany shareholders need take no action at this time.”

Strategy

The firm, which famously featured in Breakfast at Tiffany’s starring Audrey Hepburn, added that it is “successfully executing on its business plan and remains focused on achieving its goal of becoming the next generation luxury jeweller”.

Tiffany is receiving financial advice from Centerview Partners and Goldman Sachs, while Sullivan & Cromwell is serving as its legal advisor.

The offer comes as Tiffany has struggled with stagnating sales as China’s slowing economy has weighed on spending by Chinese tourists, who make up a substantial portion of luxury spending. The strong dollar has also made Tiffany products more expensive for consumers outside the US.

LVMH competes with the Kering Group, which owns Gucci and Saint Laurent, and Richemont SA, which is the owner of Cartier.

The Glenmorangie Company joined LVMH in 2005 in a deal worth £300 million, to join the likes of Hennessy cognac in its wine and spirits house. The Scottish whisky group behind Ardbeg had been put up for sale by the Macdonald family, with LVMH’s main rival Pernod Ricard having withdrawn from bidding.

LVMH earlier this month announced a 16 per cent increase in revenue, reaching €38.4bn (£33bn) in the first nine months of 2019, and said it would “pursue its strategy focused on innovation and targeted geographic expansion in the most promising markets”.

It has about 156,000 staff and about 4,600 stores worldwide.

Tiffany was founded in 1837 when Charles Lewis Tiffany opened a shop in New York city. Today, it has more than 300 stores and 14,000 employees globally.