Tiffany Board Signs Off On Discounted Merger Deal With LVMH

The Tiffany & Co TIF - LVMH Moet Hennessy Louis Vuitton SA LVMUY deal would proceed at a newly-decided price of $131.50 per share, marking the end of a dispute between the two companies, according to the Wall Street Journal.

What Happened: Tiffany’s board approved the reduced rate Wednesday night, down from the initially proposed rate of $135 per share. At the time, the purchase consideration was estimated at $16.2 billion.  

With the renegotiated terms, the European luxury goods company LVMH would save approximately $430 million.

Tiffany will continue to pay stakeholders a $0.58 dividend per share, a decision that drew criticism from LVMH, the Journal reports.

Why Does It Matter: During the pandemic, Tiffany was forced to shut down stores which significantly impacted sales. On the other hand, the European company considered backing out of the deal.

The disagreements intensified after both companies filed lawsuits in the U.S. Tiffany was seeking enforcement of the agreement or compensation in case LMVH backs out. The latter countersued Tiffany in late September, questioning the validity of the agreement due to poor market conditions.

Price Movement: Tiffany shares traded 0.4% lower at $129.40 in the pre-market session on Thursday. LVMH shares closed 4.28% lower at $93.90 in the otc market on Wednesday.