They should consolidate now, they bit off more than they could chew back in the 90s and early 2000s. They need to close shops, get a new, younger design director, bring back archival pieces and introduce fun new ones.
French luxury group LVMH offers to buy U.S jeweler Tiffany: sources
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They are renovating the flagship and even opening a cafe. So there seems to be some optimism there.
The merger would have bring an injection of cash, effective marketing to the company, LVMH has such a tight grip on the luxury market... They revive Bulgari for a new audience for example.
Tiffany needs LVMH atm.
I hate to hear that.But I heard that they were renovating the flagship before the COVID-19 and I heard about the cafe. Is this a second cafe that is being opened?
They are probably making the cafe bigger because so many want to go, but have been turned away due to how difficult it is to get a reservation as they open up 30 days prior but slots get taken up the morning reservations open up.
Blow For Billionaire Bernard Arnault As Tiffany Fast-Tracks $16 Billion LVMH Takeover To U.S. Court
www.forbes.com
Sep 21, 2020, 01:07 pm EDT
By David Dawkins
Blow For Billionaire Bernard Arnault As Tiffany Fast-Tracks $16 Billion LVMH Takeover To U.S. Court
The LVMH chief will get a better sense today of whether he’ll be forced to pay the full $16 billion price for the iconic American jeweler.
www.forbes.com
Update, Sept. 21, 2020: On Monday a Delaware court granted Tiffany & Co.’s motion to fast-track their lawsuit against LVMH. The court set a trial date of January 5, 2021.
“We appreciate the Court’s ruling today to expedite the process,” Tiffany chairman Roger Farah said in a statement. “Despite LVMH’s ongoing efforts to avoid paying the agreed-upon price for Tiffany, a trial on January 5, 2021 will hopefully lead to a ruling prior to the expiration of U.S. antitrust clearance on February 3, 2021 and enable us to protect our company and our shareholders.” LVMH, meanwhile, said in a statement that it “takes note of the decision by the Delaware Court of Chancery, which stated that the trial should begin in January 2021 and not before the November 24, 2020 Outside Date as Tiffany had requested” and said that the luxury giant is “fully confident that it will be able to defeat Tiffany’s accusations and convince the Court that the conditions necessary for the acquisition of Tiffany are no longer met.”
***
The $16 billion battle between Bernard Arnault’s luxury group LVMH and U.S. jewelry giant Tiffany & Co. faces a key court decision today. Lawyers for Tiffany are attempting to fast-track their case and force LVMH to complete the deal to acquire Tiffany, which it agreed to in November.
Tiffany & Co. is fighting to move up the Delaware court’s hearing on the deal to before the November 24 termination date specified by the agreement. If the case isn’t heard before the termination date, Tiffany executives fear any decision would be a moot point since the deal would have already expired. Last week LVMH asked the court to dismiss Tiffany’s request, arguing that it was filed “feverishly and hastily” and that “[t]here are no objective reasons why the upcoming trial should not take place within a normal timeframe.” It asked the court to hold the trial in six or seven months.
On Friday, LVMH—which has been facing charges from Tiffany that it’s attempting to “run out the clock” on the deal—confirmed that it has submitted the transaction for approval by the European Commission, one of several steps it must take before the merger could go through, and a well-timed signal to the U.S. court that the luxury giant is acting in good faith. A source close to LVMH told Forbes that Tiffany can no longer claim that LVMH is dragging its feet. A Tiffany spokesperson, meanwhile, said it is “delighted” the filing has “finally been made,” but, “[t]he speed with which LVMH acted after Tiffany filed its complaint in Delaware only underscores LVMH’s delays and lack of compliance with the Merger Agreement over the prior months.”
What Went Wrong?
The deal was quietly on the rocks until two weeks ago, when LVMH made a major announcement: the company said that it would be putting the deal on hold, citing a letter from French European and Foreign Affairs Minister that arrived “in reaction to the threat of taxes on French products by the U.S.” LVMH claimed it had been “directed” to “defer” the acquisition of Tiffany until after January 6th of next year. Tiffany immediately filed a lawsuit on September 9.
As the relationship between Arnault’s LVMH’s, who is Europe’s richest person, and Tiffany – the brand he once described as an “American icon” – continues to break down, further details have now emerged. A source from inside the U.S. jewelry giant told Forbes that Tiffany is prepared to litigate and sees no case for a price reduction.
A major complaint of LVMH’s is that Tiffany has continued to pay out $70 million in dividends per quarter, even during the pandemic. The Tiffany source says that the $0.58 per share dividend was “very clear” in the deal announcement and proxy statement, and any change to the dividend would have risked shareholder litigation and further delayed the deal (a claim LVMH disputes).
With Tiffany in a strong financial position, holding some $1.1 billion in cash reserves according to a recent filing with the Securities and Exchange Commission, the source alleges that LVMH used the pandemic as an “excuse” to attempt to stop the dividend payments, which would result in more cash on the balance sheet for LVMH to inherit when they acquire the company.
LVMH did not respond to a request for further comment on the allegations.
However, the company’s concern over the state of the U.S. market, and of Tiffany & Co.’s response to the pandemic, is well documented. After Tiffany announced a net loss of $32.7 million during the first half of 2020, compared to a $261 million profit over the same period in 2019, LVMH described the results and its forecasts for 2020 as “disappointing” and “significantly inferior to those of comparable brands of the LVMH Group during this period.”
A source from within the LVMH camp told Forbes last week that the dividend payments Tiffany has made to shareholders since the deal was announced, especially those paid out in May and August during the pandemic, which total $140 million, was viewed by LVMH as “literally burning cash” and a cause for genuine concern. Tiffany CEO Alessandro Bogliolo said in last week’s statement, “LVMH’s allegations regarding mismanagement are both untrue and legally irrelevant.”
The first signs that the deal was in trouble came in June, following the publication of a story on fashion industry news site WWD. The article cites concern from the LVMH board in late May over the state of the U.S. market and Tiffany’s ability to cover its debt covenants. Tiffany has since rejected the allegation citing its strong liquidity position and cash reserves. The article does not specifically mention dividends or French political influence, the two key points made in LVMH’s statements since September. However, at this point Tiffany’s dealmakers began preparing to protect the agreed price through litigation, according to a source from Tiffany’s currently involved in the lawsuit.
Tiffany’s argument to fast-track their complaint will be heard at 3pm eastern time today.
Blow For Billionaire Bernard Arnault As Tiffany Fast-Tracks $16 Billion LVMH Takeover To U.S. Court
The LVMH chief will get a better sense today of whether he’ll be forced to pay the full $16 billion price for the iconic American jeweler.
www.forbes.com
Sep 21, 2020, 01:07 pm EDT
By David Dawkins
Blow For Billionaire Bernard Arnault As Tiffany Fast-Tracks $16 Billion LVMH Takeover To U.S. Court
The LVMH chief will get a better sense today of whether he’ll be forced to pay the full $16 billion price for the iconic American jeweler.
Update, Sept. 21, 2020: On Monday a Delaware court granted Tiffany & Co.’s motion to fast-track their lawsuit against LVMH. The court set a trial date of January 5, 2021.
“We appreciate the Court’s ruling today to expedite the process,” Tiffany chairman Roger Farah said in a statement. “Despite LVMH’s ongoing efforts to avoid paying the agreed-upon price for Tiffany, a trial on January 5, 2021 will hopefully lead to a ruling prior to the expiration of U.S. antitrust clearance on February 3, 2021 and enable us to protect our company and our shareholders.” LVMH, meanwhile, said in a statement that it “takes note of the decision by the Delaware Court of Chancery, which stated that the trial should begin in January 2021 and not before the November 24, 2020 Outside Date as Tiffany had requested” and said that the luxury giant is “fully confident that it will be able to defeat Tiffany’s accusations and convince the Court that the conditions necessary for the acquisition of Tiffany are no longer met.”
***
The $16 billion battle between Bernard Arnault’s luxury group LVMH and U.S. jewelry giant Tiffany & Co. faces a key court decision today. Lawyers for Tiffany are attempting to fast-track their case and force LVMH to complete the deal to acquire Tiffany, which it agreed to in November.
Tiffany & Co. is fighting to move up the Delaware court’s hearing on the deal to before the November 24 termination date specified by the agreement. If the case isn’t heard before the termination date, Tiffany executives fear any decision would be a moot point since the deal would have already expired. Last week LVMH asked the court to dismiss Tiffany’s request, arguing that it was filed “feverishly and hastily” and that “[t]here are no objective reasons why the upcoming trial should not take place within a normal timeframe.” It asked the court to hold the trial in six or seven months.
On Friday, LVMH—which has been facing charges from Tiffany that it’s attempting to “run out the clock” on the deal—confirmed that it has submitted the transaction for approval by the European Commission, one of several steps it must take before the merger could go through, and a well-timed signal to the U.S. court that the luxury giant is acting in good faith. A source close to LVMH told Forbes that Tiffany can no longer claim that LVMH is dragging its feet. A Tiffany spokesperson, meanwhile, said it is “delighted” the filing has “finally been made,” but, “[t]he speed with which LVMH acted after Tiffany filed its complaint in Delaware only underscores LVMH’s delays and lack of compliance with the Merger Agreement over the prior months.”
What Went Wrong?
The deal was quietly on the rocks until two weeks ago, when LVMH made a major announcement: the company said that it would be putting the deal on hold, citing a letter from French European and Foreign Affairs Minister that arrived “in reaction to the threat of taxes on French products by the U.S.” LVMH claimed it had been “directed” to “defer” the acquisition of Tiffany until after January 6th of next year. Tiffany immediately filed a lawsuit on September 9.
As the relationship between Arnault’s LVMH’s, who is Europe’s richest person, and Tiffany – the brand he once described as an “American icon” – continues to break down, further details have now emerged. A source from inside the U.S. jewelry giant told Forbes that Tiffany is prepared to litigate and sees no case for a price reduction.
A major complaint of LVMH’s is that Tiffany has continued to pay out $70 million in dividends per quarter, even during the pandemic. The Tiffany source says that the $0.58 per share dividend was “very clear” in the deal announcement and proxy statement, and any change to the dividend would have risked shareholder litigation and further delayed the deal (a claim LVMH disputes).
With Tiffany in a strong financial position, holding some $1.1 billion in cash reserves according to a recent filing with the Securities and Exchange Commission, the source alleges that LVMH used the pandemic as an “excuse” to attempt to stop the dividend payments, which would result in more cash on the balance sheet for LVMH to inherit when they acquire the company.
LVMH did not respond to a request for further comment on the allegations.
However, the company’s concern over the state of the U.S. market, and of Tiffany & Co.’s response to the pandemic, is well documented. After Tiffany announced a net loss of $32.7 million during the first half of 2020, compared to a $261 million profit over the same period in 2019, LVMH described the results and its forecasts for 2020 as “disappointing” and “significantly inferior to those of comparable brands of the LVMH Group during this period.”
A source from within the LVMH camp told Forbes last week that the dividend payments Tiffany has made to shareholders since the deal was announced, especially those paid out in May and August during the pandemic, which total $140 million, was viewed by LVMH as “literally burning cash” and a cause for genuine concern. Tiffany CEO Alessandro Bogliolo said in last week’s statement, “LVMH’s allegations regarding mismanagement are both untrue and legally irrelevant.”
The first signs that the deal was in trouble came in June, following the publication of a story on fashion industry news site WWD. The article cites concern from the LVMH board in late May over the state of the U.S. market and Tiffany’s ability to cover its debt covenants. Tiffany has since rejected the allegation citing its strong liquidity position and cash reserves. The article does not specifically mention dividends or French political influence, the two key points made in LVMH’s statements since September. However, at this point Tiffany’s dealmakers began preparing to protect the agreed price through litigation, according to a source from Tiffany’s currently involved in the lawsuit.
Tiffany’s argument to fast-track their complaint will be heard at 3pm eastern time today.
Tiffany-LVMH Deal Could Still Happen, Analyst Says, Possibly At a Lower Price -- Barrons.com
11:06 am ET September 28, 2020 (Dow Jones) Print
By Teresa Rivas
Tiffany is battling LVMH in court, trying to compel the French luxury conglomerate to go through with its pre-pandemic agreement to buy the jeweler. While a trial might be unlikely, Cowen thinks the deal could still happen -- although it might be at a lower price or with another buyer.
Analyst Oliver Chen spoke with legal experts in the U.S. and Europe about the case, following last week's developments, including Tiffany's (TIF) success in fast-tracking the trial in Delaware and revelations reported by the Wall Street Journal about differences between the French government and LVMH Moët Hennessy Louis Vuitton (MC.France) on how the effort to delay the transaction came about.
French Foreign Minister Jean-Yves Le Drian said he was responding to a query from LVMH when he wrote a letter to the luxury conglomerate about delaying the Tiffany acquisition. According to the Journal, the remark called into question earlier statements by LVMH, which had said the letter about postponing the acquisition was unsolicited.
Working with a translation -- as LVMH hasn't given Tiffany the original letter from the French government -- Chen's experts think the "letter could be more characterized as advice than a government mandate," given the use of the word "should," and the fact that it was a response to LVMH.
They also think the French government likely lacks a legal basis to stop the deal, because there aren't major antitrust concerns, the luxury sector isn't in need of tight regulation, and there is no precedent for government involvement.
Chen thinks this could point to a settlement before the January trial date. One possible option would be the acquisition happening, but at a lower price -- between $120 and $130 a share -- although Tiffany shareholders would have to vote again on such a move. The disputed deal was for $135 a share.
By contrast, if the original merger agreement is invalidated, Chen notes that Tiffany could continue to be a stand-alone company, or merge with another luxury player such as Compagnie Financiere Richemont (CFRUY) or Kering (PPRUY). Of the two, he thinks a deal would be more accretive to Richemont.
Tiffany shares were up 0.4% to $116.16 Monday morning, as the Dow Jones Industrial Average rose 1.8%.
The stock has fallen 13% in 2020, hurt by the pandemic -- which has weighed on tourism and demand for high-price baubles -- and questions about the merger. The decline could make shareholders more willing to accept a deal at a reduced per-share price -- from LVMH or a rival.
Write to Teresa Rivas at [email protected]
(END) Dow Jones Newswires
September 28, 2020 11:06 ET (15:06 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
11:06 am ET September 28, 2020 (Dow Jones) Print
By Teresa Rivas
Tiffany is battling LVMH in court, trying to compel the French luxury conglomerate to go through with its pre-pandemic agreement to buy the jeweler. While a trial might be unlikely, Cowen thinks the deal could still happen -- although it might be at a lower price or with another buyer.
Analyst Oliver Chen spoke with legal experts in the U.S. and Europe about the case, following last week's developments, including Tiffany's (TIF) success in fast-tracking the trial in Delaware and revelations reported by the Wall Street Journal about differences between the French government and LVMH Moët Hennessy Louis Vuitton (MC.France) on how the effort to delay the transaction came about.
French Foreign Minister Jean-Yves Le Drian said he was responding to a query from LVMH when he wrote a letter to the luxury conglomerate about delaying the Tiffany acquisition. According to the Journal, the remark called into question earlier statements by LVMH, which had said the letter about postponing the acquisition was unsolicited.
Working with a translation -- as LVMH hasn't given Tiffany the original letter from the French government -- Chen's experts think the "letter could be more characterized as advice than a government mandate," given the use of the word "should," and the fact that it was a response to LVMH.
They also think the French government likely lacks a legal basis to stop the deal, because there aren't major antitrust concerns, the luxury sector isn't in need of tight regulation, and there is no precedent for government involvement.
Chen thinks this could point to a settlement before the January trial date. One possible option would be the acquisition happening, but at a lower price -- between $120 and $130 a share -- although Tiffany shareholders would have to vote again on such a move. The disputed deal was for $135 a share.
By contrast, if the original merger agreement is invalidated, Chen notes that Tiffany could continue to be a stand-alone company, or merge with another luxury player such as Compagnie Financiere Richemont (CFRUY) or Kering (PPRUY). Of the two, he thinks a deal would be more accretive to Richemont.
Tiffany shares were up 0.4% to $116.16 Monday morning, as the Dow Jones Industrial Average rose 1.8%.
The stock has fallen 13% in 2020, hurt by the pandemic -- which has weighed on tourism and demand for high-price baubles -- and questions about the merger. The decline could make shareholders more willing to accept a deal at a reduced per-share price -- from LVMH or a rival.
Write to Teresa Rivas at [email protected]
(END) Dow Jones Newswires
September 28, 2020 11:06 ET (15:06 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
I may be in the minority, I wish the deal didn't go through. it seems to me that when LVMH get their hands on a company that company suffers in some way.
I'm with you. I do not like any of the LVMH brands right now. I feel like Bernard Arnault is really destroying all of the fashion houses he owns. I only have some hope left for Fendi. But the rest are pretty bad overall, I feel the same with Kering. I think that is why the designers catching my eye are Hermes for the sophistication and uber-luxe offerings, Margiela and Prada for the experimental creativity, and lots of newer designers such as Marine Serre, Pyer Moss, Peter Do, Telfar, and Mowalola.
Me too! I’m afraid customer service will change as a result of the potential takeover.
I don't want the deal to go through either. LV has had 6 price increases from October 2019 to (will be) October 2020, during a pandemic. Tiffany has not. LVMH is more about money than the customer.
I agree, i'm also afraid Tiffany will now cut corners on Jewelry as well, I've been purchasing items off my wishlist for the past few months in fear of the deal going through, as I already know what will happen.
I agree, Yoshi, you said more succinctly exactly what I was trying to express!
