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More than 99 per cent of Tiffany & Co. shareholders have LVMH's revised acquisition offer, which values the company at $US15.8 billion.
More than 99 per cent of Tiffany & Co. shareholders have LVMH's revised acquisition offer, which values the company at $US15.8 billion.

Tiffany & Co. shareholders approve new LVMH deal

The revised merger agreement reached by Tiffany & Co. and French conglomerate Moët Hennessy Louis Vuitton (LVMH) in October has been approved by the US company’s shareholders, with the deal expected to close on 7 January.

More than 99 per cent of Tiffany & Co. shareholders voted to approve the fresh deal at an extraordinary meeting, which was held digitally on 30 December. The new agreement values the jewellery company at $US15.8 billion, or $US131.50 per share, revised down from the previous offer of $US135 per share.

The shareholder approval follows an acrimonious war of words and legal spat between the two luxury juggernauts, which began when LVMH withdrew from the previous takeover deal in early September.

The shareholder approval follows an acrimonious war of words and legal spat between the two luxury juggernauts, which began when LVMH withdrew from the previous takeover deal in early September

At the time, LVMH accused Tiffany & Co. of "blatant mismanagement" of the COVID-19 pandemic, while Tiffany & Co. accused the French conglomerate of having "unclean hands".

Indeed, at one point the two parties were scheduled to attend a four-day trial at the Court of Chancery of the State of Delaware on 5 January 2021.

Yet by 30 October 2020, a new agreement had been negotiated and approved by the Tiffany & Co. board, with Bernard Arnault, president and CEO LVMH, saying, “This balanced agreement with Tiffany’s board allows LVMH to work on the Tiffany acquisition with confidence and resume discussions with Tiffany’s management on the integration details. We are as convinced as ever of the formidable potential of the Tiffany brand and believe that LVMH is the right home for Tiffany and its employees during this exciting next chapter.”

Notably, US business publication the Wall Street Journal – quoting sources close to the negotiations – reports that Arnault initially sought an 11 per cent reduction in the purchase price due to the COVID-19 downturn, but was rebuffed.

The new deal instead represents a 2.5 per cent reduction; however, the Tiffany & Co. purchase still ranks as LVMH's most expensive acquisition in its 34-year history.

The Wall Street Journal also reports that the new agreement contains provisions preventing LVMH from attempting to withdraw a second time, including a damages clause based on the original $US135 price, and that five senior Tiffany & Co. executives will leave the company once LVMH assumes control.

 

More reading:
TIMELINE: Inside the Tiffany & Co. and LVMH merger (Updated)
Tiffany & Co. and LVMH revive deal, drop court case
Tiffany & Co. board approves new $15.8 billion LVMH offer: report
LVMH files countersuit against Tiffany & Co.; trial date set
 











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