By Kuldip K. Ambastha
(This week’s update is a follow-up to What Caught Our Attention in the Investment World? – Week of October 28-November 1, 2019.) On Wednesday, September 9, 2020, the stock of Tiffany & Co. saw a -6.4% return. Tiffany & Co. (TIF) and LVMH Moët Hennessy (LVMH) (LVMUY) were in the news again this week. Tiffany & Co. is a New York-based company in the luxury jewelry sector. LVMH is a French company headed up by prominent billionaire Bernard Arnault. In late October 2019, the stock of Tiffany & Co. surged due to an unsolicited offer by LVMH to buy the company for $120 per share. If the deal went through, LVMH would have added Tiffany & Co. to a stable of brands including Louis Vuitton, Christian Dior, and Bulgari.
The takeover offer for Tiffany & Co. from LVMH has now become complicated. Why? LVMH received a request from the French government to delay the closing of the deal, plus concerns were raised about how the coronavirus pandemic will affect luxury companies like Tiffany & Co. Legal actions from both sides across the world are to follow in the future. Litigation has already started in the USA, Japan, Mexico, Taiwan, plus various European countries. Negotiations in the future between the two companies may yield a successful takeover effort in the end, Tiffany & Co. may survive as a standalone company, or another bidder may acquire Tiffany & Co. instead.
Due to the coronavirus pandemic cutting off global tourism, Tiffany & Co. has struggled to bring potential customers into its iconic flagship stores, castle-like buildings in New York City, San Francisco, Chicago, Tokyo, Paris, and elsewhere. Also, Tiffany & Co. has had trouble with attracting millennial generation customers to its jewelry offerings, since buying a solitary diamond ring does not appeal to this generation of customers as much as it had to prior generations of customers. Per what commentators have stated, changes in Tiffany & Co.’s marketing efforts, customer experience, brick-and-mortar store presence, and so on likely will be needed in order for the company to be successful going forward, whether or not Tiffany & Co. is acquired by LVMH or another entity.
Keywords – Tiffany & Co., TIF, LVMH Moët Hennessy, LVMH, LVMUY, Bernard Arnault, Louis Vuitton, Christian Dior, Bulgari, U.S., France, luxury, jewelry, retail, M&A, mergers, acquisitions, over-the-counter, OTC, billionaire.
Disclosure – The principals and clients of Ambastha Financial LLC do not have any position in TIF or LVMUY.
Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2020 – Ambastha Financial LLC.