According to reports, the $16.2bn acquisition of Tiffany & Co. by luxury good giant LVMH may no longer be a sure thing.
Board members of LVMH Moët Hennessy Louis Vuitton had a meeting in Paris yesterday evening specifically to discuss the deal amid a deteriorating situation in the US market. Members appear to be concerned about several factors, ranging from the economic impact of Covid-19 to growing social unrest in the US to Tiffany’s ability to cover all its debt covenants at the end of the transaction, which had been pencilled in to conclude in the middle of the year.
Last November, LVMH, the world’s largest luxury good company, entered into a deal to acquire Tiffany for $135 a share in cash. The agreement came after the Tiffany board, in October, rejected an all-cash offer by LVMH of $120 a share — an offer that many analysts agreed was too low.
