The world’s biggest luxury goods firm, LVMH, that agreed to buy Tiffany for $16bn, said it will not buy the US jeweller’s stock on the open market on Thursday.
Paris-based LVMH agreed to acquire Tiffany last November, but coronavirus-induced turmoil on financial markets has overshadowed the deal, and saw the US firm’s stock plunge 11% this week.
Tiffany’s share price tumbled in March on the back of expectation that sales of its luxury jewellery would fall. Although the stock recovered, it fell again this week on speculation LVMH’s bid was in doubt, and that the French giant was buying up Tiffany stock in order to force the sale price down.
The board of the European furm added, “Considering the recent market rumours, LVMH confirms, on this occasion, that it is not considering buying Tiffany shares on the market.”
LVHM led by Bernard Arnault, Europe’s richest man agreed in November to acquire Tiffany, a brand given worldwide recognition in the 1961 film Breakfast at Tiffany’s starring Audrey Hepburn (pictured). Berkshire Hathaway was approached for a part in the deal, but chairman Warren Buffett decided to pass.
LVHM agreed to acquire Tiffany at $135 per share. However, the share price has fallen amid the broad-based selling in stock markets. Tiffany is trading at just under $114 on Thursday morning. The company’s first-quarter earnings are scheduled for later this week. Tiffany’s share price is down 14% for the year.
Tiffany was founded in 1837 and employs over 14,000 people. It has around 300 stores globally and 12 of these are in the UK.
LVHM owns more than 70 luxury brands, such as Moet & Chandon champagne, Louis Vuitton luggage and Givenchy fashion. While Arnault has taken a $30 billion hit from the pandemic, he is plotting a comeback.
Note: These are testing times for individuals. If you’re interested in raising finance to see you through this tough period, see our list of recommended loan providers. There is also a list of loan providers for people with bad credit.