Is LVMH going to renegotiate the terms of the Tiffany acquisition? Share prices of Tiffany stocks are decreasing with the Coronavirus outbreaks. In other words, the French luxury conglomerate could acquire the US brand’s shares for a lower price than that offered previously. Meanwhile, Tiffany has published its yearly results: stable throughout the year, with growth during the fourth quarter.
Bloomberg was the first to publish the news. In November 2019, LVMH has agree to pay Tiffany’s shares 135 USD each. The acquisition was to be concluded before the first semester of 2020. Now the current emergency seems to have put the matter in jeopardy.
Buying at market price
The French group has allegedly presented the option to buy shares on the market with Tiffany’s board. No final decision has been made, says Bloomberg, citing anonymous sources, as they are currently evaluating the legal obstacles for this method, which would allow LVMH to save circa 13% of what it had agreed. The price per share was of 118 USD before Bloomberg published the news. Yesterday it reached 126 USD.
Tiffany’s yearly results
Meanwhile, Tiffany closed its fourth fiscal quarter in January, with revenue up by 2.8% at 1.36 billion USD, in line with FactSet’s estimates, according to what written by Les Echos. Profits were of 1.80 USD per share, higher than the forecast of 1.77 USD per share by Ibes Refinitiv, cited by Reuters. Yearly, Tiffany remains stable in 2019. Revenue was at 4.4 billion USD, unchanged at current rates and +1% at constant rates. Comparable sales: -1% at current rates and unchanged at constant rates. Net income was of 541 million USD: -8% in comparison to the previous year.