Tiffany, LVMH Near Agreement on New Deal Terms -- 2nd Update
October 28 2020 - 12:56PM
Dow Jones News
By Cara Lombardo and Dana Cimilluca
Tiffany & Co. is nearing an agreement to accept a lower
price in its takeover by LVMH Moët Hennessy Louis Vuitton SE that
would end a bitter dispute between the luxury-goods companies.
The companies have come to a preliminary agreement on new deal
terms that would call for LVMH to pay $131.50 for the iconic U.S.
jewelry maker, according to people familiar with the matter. That
is down from a prior agreement of $135 a share.
Tiffany's board plans to consider the revised terms at a meeting
later Wednesday, and there is no guarantee they will accept them,
the people said. Should they accept the revised terms, litigation
that erupted over the deal would go away and conditions required
for it to close would be reduced, some of the people said. That
would pave the way for a new shareholder vote and a closing of the
deal possibly by January.
Tiffany agreed to sell itself to LVMH late last year in a
roughly $16.2 billion deal. The acquisition represented the biggest
bet yet by LVMH under Bernard Arnault, the French billionaire who
has been its chief executive and controlling shareholder for three
decades. But LVMH said in September it was backing out of the deal,
blaming trade disputes between France and the Trump administration.
Many saw the move as a bid to lower the price.
Tiffany said the argument was a pretext to back out of the deal
after the coronavirus pandemic upended the luxury-goods industry
and sued LVMH in Delaware Chancery Court to enforce the agreement.
That prompted LVMH to countersue, arguing the U.S. jeweler's
business had been so deeply damaged during the pandemic that their
takeover agreement is no longer valid.
Tiffany's board is confident in its legal position but may
accept a slight price reduction for increased certainty of a deal
closing, one of the people said. Tiffany shareholders have also
continued to receive a 58-cent per-share quarterly dividend in the
meantime and may get another one before the deal closes.
The two sides were set to go to trial in early January.
Write to Cara Lombardo at cara.lombardo@wsj.com and Dana
Cimilluca at dana.cimilluca@wsj.com
(END) Dow Jones Newswires
October 28, 2020 12:41 ET (16:41 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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