Tiffany Company is close to an agreement to cut the price of its sale to the French conglomerate LVMH Moët Hennessy Louis Vuitton, three people with knowledge of the talks said on Wednesday. The potential settlement would end a dispute between the companies and seal one of the luxury world’s largest deals.
Tiffany and LVMH have discussed a revised price of $131.50 a share, down from $135, the people said. That would bring the sale to just under $16 billion, or about $400 million less than before.
Directors of Tiffany are scheduled to meet later on Wednesday to vote on the proposal, one of these people said. If they approve, it would settle an increasingly bitter legal battle over the American jewelry retailer.
LVMH agreed to buy Tiffany in November 2019, intent on adding the company’s diamond rings and robin egg blue boxes to a stable of brands that includes Louis Vuitton, Dior and Givenchy. The acquisition would give LVMH a bigger foothold in the United States, executives said at the time, as well as expose Tiffany to more shoppers in Europe and China. The move also promised to cement the status of Bernard Arnault, the LVMH chairman and chief executive, as the top deal maker in the luxury business.
But the French luxury giant grew increasingly nervous about the transaction, its biggest ever, as the pandemic devastated the retail industry. Tiffany’s sales fell by nearly 40 percent in the six months to July, and it recorded a loss of more than $30 million. The company’s shares fell far below the deal price, as investors doubted LVMH’s resolve in going through with the takeover.
A deadline to complete the deal in August was delayed by three months and then, in September, LVMH threatened to abandon the takeover altogether, accusing Tiffany of poor financial performance and breaches of the acquisition agreement. Also, and unusually, LVMH said that the French government asked it to pause the takeover because of the United States’s trade battle with France.
Tiffany sued LVMH in a Delaware court to compel the company to complete the deal. After more legal wrangling about the timing of the trial, it was scheduled for early January. Now, that might not be needed.
News of the potential revision to the deal was reported earlier by The Wall Street Journal.