French multinational luxury goods conglomerate LVMH raised its bid to acquire U.S. jewelry chain Tiffany & Co to nearly $16 billion with a condition of confidential due diligence by opening of its books to the French company, according to a last Wednesday report by Reuters, citing people familiar with the matter.
LVMH, in October, offered Tiffany with an all cash acquisition deal of $120 for each share, but early this month the iconic U.S. engagement ring maker company rejected that offer for being undervaluing it significantly.
The development of sweetening the bid close to $130 per share by LVMH came to be an important milestone in the bid as Tiffany agreed to open its books to the French company, the sources said. But Tiffany is still in efforts of concluding the negotiations with better offer and there is also a chance of deal to be concluded unsuccessfully, the sources added.
According to consultancy firm Bain & Co, in 2018, Jewelry remained the one of the most profit making segment of the luxury industry and for the current year the firm forecasted the comparable sales to be increased by 7% percent in the global market of worth $20 billion.
Founded in 1837 in New York with 1961 featuring in movies “Breakfast at Tiffany’s” with Audrey Hepburn in the cast, Tiffany, since last few years, remained struggling in annual profits and sales till 2017 when its revenues turned around the situation.
With steering in the hands of Chief Executive Alessandro Bogliolo, who formerly served in Italian luxury brand Bvlgari and also lead the fashion firm Diesel as its head, Tiffany remained focused in establishing its e-commerce business and putting efforts to lure younger customers with new designs and earnings and pendants at affordable prices.
With the acquisition of Tiffany, LVMH will not only get exposure to the diamond and bridal category but will also get an access to more of the U.S. luxury shoppers.
