New York (AFP)

American jeweler Tiffany has agreed to lower his price to save his marriage to French luxury giant LVMH after an eventful engagement period marked by political intervention at the highest level in France.

The discussions are not yet fully finalized but the principle of a price reduction has been established, two sources involved in the talks told AFP on Wednesday.

The companies are still negotiating whether LVMH will pay $ 131 or $ 131.50 per Tiffany share, instead of the $ 135 originally planned, one said, while the other ensured the final price would be $ 131.50 per share, as proposed by the jeweler himself.

At that level, the merger would be worth $ 15.96 billion based on the number of Tiffany shares registered with the US market policeman, the SEC, as of July 31.

This would represent a discount of at least $ 425 million compared to the starting amount of the transaction but would remain a large-scale operation in the luxury world.

It is not excluded that there is a last-minute hitch, warned one of the sources, while the other ensured that the two parties were satisfied to have reached a compromise.

Also according to the latter source, the marriage could finally be celebrated in January 2021.

An announcement should fall overnight, Paris time, headquarters of the French group, owner of the Louis Vuitton brand and Moët Hennessy champagne.

Neither Tiffany nor LVMH had immediately followed up on AFP's requests.

LVMH had agreed at the end of 2019 to put on the table more than 16 billion dollars to add the jeweler to its range of luxury products.

But the pandemic and the economic crisis it triggered have affected sales of the American flagship, whose famous flagship store adjoins the Trump Tower on Fifth Avenue in Manhattan.

- Sales at half mast -

Tiffany admitted having experienced a soft spot in the spring and defended having done less well than her direct competitors.

But sales have since picked up, although they are expected to remain lower until early next year.

A diagnosis that does not share the group of Bernard Arnault, who considers that the conditions have changed.

LVMH thus announced at the beginning of September that it was "no longer able" to acquire Tiffany "as is".

The owner of the Christian Dior and Givenchy labels blames the management of the jeweler for its mismanagement in times of crisis and the payment of a high dividend when the company was suffering losses.

To justify its desire to end the engagement, LVMH also referred to a letter from Jean-Yves Le Drian, the French Minister of Foreign Affairs, asking him to postpone the acquisition in view of the trade conflict between the United States and the Union. European.

This last element was seen as a disguised means for the French group not to offend its partners in the United States, where it is very active.

Mr. Le Drian then assured the French deputies that he had, with this letter, "responded to a request from the LVMH group."

The American company had in any case immediately filed a complaint with a Court of Justice in Delaware (east), arguing that the luxury giant was only seeking to evade its obligations and not to pay the original price.

This procedure was followed shortly after by a counterattack by LVMH before the same court.

The American justice fixed January 5, 2021 as the date of the trial to oppose the two groups, however suggesting to the parties to resume dialogue, which they did.

If the deal is upheld, it would end those legal remedies, the sources said.

© 2020 AFP