Paris (AFP)
The diamond has lost carats but it is shining again: LVMH and Tiffany finally decided on Thursday to pick up the pieces and unite, at a price revised down to some $ 425 million.
This marriage announced for the best at the end of 2019 in a very buoyant economic and financial context has since seen the worst, with the Covid-19 crisis which almost got the better of this union.
131.50 dollars per share of Tiffany against 135 initially, such is the price of peace, officially announced Thursday by the giant of the luxury in a press release.
Compared to the 16.2 billion dollars initially planned, this represents "a reduction of the order of 425 million", a source close to the matter told AFP, "or a final amount of about 15.775 billion dollars .
According to this same source, "it's a very good deal and everyone is happy, Tiffany because the price drop is reasonable and LVMH because it saves a lot of money and uncertainties".
"This balanced agreement reached with the Board of Directors of Tiffany allows LVMH to work on the acquisition of Tiffany in all serenity and to resume discussions with the management" of the jeweler on the terms of integration, said the CEO of LVMH, Bernard Arnault, quoted in the press release saying "more than ever convinced of the formidable potential of the" American brand.
"We continue to believe in the power and value of the Tiffany brand and in the indisputable long-term strategic and financial benefits of this union," said Alessandro Bogliolo, Managing Director of Tiffany.
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"Since the breakdown of the engagement in September, the rather violent words which were exchanged between the two groups did not however necessarily augur for a happy outcome", underlines to AFP Arnaud Cadart, portfolio manager at Flornoy.
The romance indeed seemed to have come to an end, when in September the global luxury giant announced that it was "no longer able" to buy Tiffany, citing the mismanagement in times of pandemic of the American jeweler and a request for a postponement from the government French linked to the trade conflict between the United States and the European Union.
"At the start of the crisis, Tiffany really let herself go through what resulted in a large loss in the first quarter. But a large dividend was paid nonetheless, paid for by a loan of 500 million dollars. Hence the very virulent reaction of LVMH ", analyzes Mr. Cadart.
"Tiffany executives have heard the message and regained control with results visible in their second and third quarter publications and an offensive on the legal ground," he adds.
Just after the break announced by LVMH, the battle had indeed started on this ground, with a complaint by the American jeweler to a Delaware Court of Justice, followed by a counterattack by LVMH before the same jurisdiction.
Tiffany, for his part, believed that the French company was only seeking to evade its commitments and not to pay the price on which the companies had agreed.
The American justice had fixed January 5, 2021 as the date of the trial to oppose the two groups, however suggesting to the parties to resume dialogue, and their new agreement at the same time drops the proceedings initiated.
The marriage should be permanently sealed in January, after a general meeting at Tiffany, at the beginning of the same month, because the new agreement requires the approval of the shareholders, added the same source familiar with the matter.
As soon as this green light is obtained, the union can be formalized, because the authorizations already given by the authorities concerned, such as the European Commission on Tuesday, remain valid.
"This remains a very nice acquisition, even if the Covid has made it less flamboyant, believes Mr. Cadart, and everyone should find their interest: Tiffany, in full confinement, can lean against a powerful group like LVMH which gets its hands on a long-term promising company ".
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