LVMH, the French luxury group, has recently made an announcement stating that it has no intentions of purchasing Tiffany shares on the open market. This news comes amidst rumors that Bernard Arnault, the chairman and controlling shareholder of LVMH, was considering renegotiating the acquisition price. The original deal, valued at $16.2 billion, was seen as a strategic move by LVMH to strengthen its presence in North America and expand its watch and jewelry businesses.

However, reports emerged suggesting that Arnault had second thoughts about the high price of the acquisition, causing a drop in Tiffany’s stock price. This situation prompted speculations that LVMH may be seeking to lower the purchase price. The statement released by LVMH did not provide clarity on whether they would respect the exact deal price, fueling further speculation about potential negotiations.

Observers in the industry have suggested that LVMH intentionally leaked information about a board meeting to manipulate Tiffany’s stock price downwards. This move would give Arnault more leverage in the negotiations, as a lower stock price would ultimately lead to a reduced acquisition cost. External factors, such as the global impact of COVID-19 and recent protests in the United States, have also contributed to the pressures faced by the luxury industry, making it a less favorable time for such a significant acquisition.

Another concern surrounding the acquisition is Tiffany’s ability to meet its debt obligations post-acquisition. If Tiffany fails to meet its financial obligations, this could potentially provide LVMH with a valid reason to back out of the deal or seek revised terms. As of now, Tiffany’s quarterly results have been postponed, adding more uncertainty to the situation.

No further comments or statements have been provided by LVMH executives, leaving industry experts and stakeholders eagerly awaiting any updates regarding the outcome of this deal.

Useful links:

1. Bloomberg: LVMH Holding Steers Clear of Buying Tiffany Shares in Open Market
2. Reuters: LVMH has no plans to buy Tiffany stock on the market