Tiffany & Co.
stock soared 33.2% in Monday premarket trading after the luxury jeweler confirmed that it received an unsolicited acquisition proposal from LVMH Moet Hennessy Louis Vuitton SE
for $120 per share in cash. Tiffany said in a statement that the “parties are not in discussions” but, as is “its fiduciary responsibility,” it is reviewing the proposal. Tiffany said its shareholders need not take any action at this time. The Wall Street Journal reported Sunday that the takeover bid was made. LVMH has also confirmed the bid. The proposal is a 30% premium to where Tiffany stock was trading when the bid was made. The LVMH portfolio includes the namesake Louis Vuitton and Fendi brands, as well as the Hennessy and Chandon brands, Bvlgari jewelry and more. “Based on our analysis, LVMH has ample financial capacity for a deal and we also expect many strategic and financial synergies given margin expansion, product extension, and global growth opportunities at Tiffany,” wrote Cowen analysts in a note. Among the factors that analysts think make Tiffany an attractive asset are its long-term relationships with diamond mines, its exposure in the bridal category, and its long-term growth potential in China. Cowen rates Tiffany outperform with a $107 price target. Tiffany stock has gained 22.4% for the year to date. LVMH is up 49%. And the S&P 500 index
has gained 20.6% for the period.
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