Luxury jewelry company Tiffany & Co has asked French conglomerate LVMH to increase its takeover bid, according to sources. The French firm already tabled a $120-per-share all-cash offer, valuing Tiffany at $14.5 billion.
However, sources say that the jeweler believes that the offer undervalues the chain. The board of Tiffany deemed the bid too low to even become the basis for talks.
According to those in the know, Tiffany told the French company that it would open its books and allow confidential due diligence if it raises its offer. LVMH is reportedly considering a new offer.
It is unknown what numbers are being discussed but $140 per share are floating around, the people said. Tiffany’s shares reached this price level in 2018 and such an offer could be the key to reaching an agreement.
Reportedly, LVMH believes that Tiffany needs to spend more cash to reinvent its brands. According to sources, the French conglomerate contends that this can be achieved only if Tiffany becomes a unit of LVMH.
In 2011, LVMH acquired Bulgari to boost its jewelry and watches subsidiary, which includes Hublot and Tag Heuer. However, the unit accounted for 9% of revenue and 7% of LVMH earnings last year.
Buying Tiffany would expose the French group to the bridal and diamond market and US luxury customers for instance. If a transaction materializes, LVMH plans to keep Bulgari and Tiffany separate.