Louis Vuitton SE (LVHM) reportedly enhanced its offer to purchase US jewelry chain Tiffany & Co over the weekend, moving it a a step closer to its long-planned acquisition of the company. The owner of popular luxury brands such as Bulgari and Louis Vuitton aims to acquire the company to tap into the rapidly-growing luxury jewelry market in the US and the rest of the world.
According to reports citing sources with knowledge of the matter, LVHM apparently sweetened its already substantial offer to acquire the company for $16.3 billion. The same sources stated that the two companies are apparently now very close to an agreement after LVMH raised its offer price for the company to around $135 per share.
Other sources have stated that the two companies could announce a finalized deal this week. Tiffany & Co was reportedly presented with the terms of the new deal on Sunday. If the deal does push through, it would be LVHM's largest takeover since it was formed in 1987 under the merger of Moet Hennessy and fashion house Louis Vuitton.
LVMH's initial offer to acquire the company in October was an all-cash deal pricing the company's shares at $130 per piece. The alleged new offer is $15 higher than the original bid. Overall, LVMH's bid represents a 7.5 percent premium over Tiffany & Co's share prices as of the close of trading on Friday last week. Apart from the increase in the price per share, other terms of the new deal have not yet been revealed.
Bernard Arnault, Europe's richest man and the CEO of LVMH, has long been trying to acquire the US jewelry giant. LVMH believes that acquiring Tiffany & Co would greatly help in its efforts to get a a bigger share of the lucrative jewelry market; a market that is becoming the fastest-growing sector in the luxury goods industry.
The French company's last major acquisition was when it bought Italy's Bulgari in 2011 in a deal estimated to be worth more than $4.08 billion. During that time, LVMH's Bulgari acquisition was the largest deal in the industry in over a decade.
LVMH's previous attempts to acquire the 182-year-old luxury jewelry and specialty retailer have so far failed. Its last offer, which was made just five weeks ago, was rejected by Tiffany with the company stating that LVMH was significantly undervaluing the company.
While Tiffany still continued to be a premier destination for luxury jewelry buyers, the company had struggled to keep up its sales numbers since 2015. Under its current CEO Alessandro Bogliolo, who had worked for fashion firm Diesel and Bulgari in the past, Tiffany was able to turn around its revenues in 2017.
