LVMH CEO looking to renegotiate Tiffany & Co. merger amid deal concerns
News comes day after Tiffany & Co. shares plunged 8% on report of deal concerns
LVMH Moët Hennessy-Louis Vuitton SE's CEO Bernard Arnault is exploring ways to pressure Tiffany & Co. to lower its agreed deal price of $135 per share, according to a report by Reuters.
Arnault is reportedly considering whether he can argue that the New York-based luxury retailer is in breach of its obligations under the $16.2 billion merger agreement, but his company has not settled on a strategy for a price cut or reopened negotiations with Tiffany, according to sources familiar with the situation.
Bernard Arnault, chairman and CEO of LVMH Moet Hennessy Louis Vuitton SE, delivers a speech at the Viva Technology conference in Paris, France, June 16, 2017. (REUTERS/Benoit Tessier)
The sources told Reuters that Tiffany does not believe there is a legal basis to renegotiate the deal.
LVMH and Tiffany did not immediately return FOX Business' requests for comment on the report by Reuters or on the status of the deal.
LOUIS VUITTON DESIGNER APOLOGIZES FOR COMMENTS ON US PROTESTS
The news comes a day after shares of Tiffany & Co. plunged more than 8 percent on a report by fashion trade publication Women's Wear Daily that the takeover of Tiffany may be less likely to go through.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TIF | NO DATA AVAILABLE | - | - | - |
According to sources cited in WWD's report, members of LVMH's board called a meeting in Paris to discuss the situation as the coronavirus pandemic and growing protests over the death of George Floyd have created an uncertain outlook for Tiffany's retail market in the United States.
In addition, LVMH board members voiced concerns about Tiffany’s ability to cover all of its debt covenants at the end of the transaction, which was expected to be concluded midyear, according to WWD.
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Tiffany's stockholders approved the merger in February. LVMH announced the proposed takeover on Nov. 24, 2019.
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This article, originally published on June 2, has been updated.