As we announced earlier, luxury jewelry brand Tiffany & Co. released its fourth quarter results on Friday, March 20, before the markets opened. In its fourth fiscal quarter, the luxury jewelry specialist published a profit lower than analysts’ estimates. As a result, LVMH could well out of the game and buy the jeweler for a much lower amount than expected.
$ 16.2 billion is the tidy sum proposed in November 2019 by Bernard Arnault for the acquisition of Tiffany & Co. at the time.
Since then, the global coronavirus and health crisis will cause the loss of money to a huge number of people … and will certainly bring down the annual results of the American jeweler.
On the stock market, Tiffany resists with difficulty. If the Tiffany & Co share gained about 1% in the pre-opening exchanges on Friday on Wall Street, given the announcement of the possibility of a buyout by LVMH, the title fell however by 6.1% in during the past month.
The company said Friday that its net profit for the quarter ended January 31 fell to 201.2 million dollars, or 1.66 dollars per share, against 204.5 million dollars, or 1.67 dollars per share, a year earlier.
This fall in Tiffany’s shares could be a real bargain for LVMH, which would buy the group 13% cheaper than expected.
Because LVMH could indeed, which it probably already does, acquire Tiffany shares directly on the market in order to smooth its purchase price down.
What to save more than a billion dollars. And who wouldn’t want to save more than a billion dollars?
However, that would mean making money on the backs of shareholders, but the law of the market is the law of the market, there is nothing we can do about it.
According to Bloomberg, which revealed this major change in strategy from Bernard Arnault and LVMH, nothing has yet been decided. We will have to wait for the publication of the annual results of the American jeweler, scheduled for Monday, March 23, 2020, and, above all, the green light from the board of directors.
Not to mention that there could be legal obstacles to the operation.
Case to follow…
Featured Photo : © Tiffany
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Claire Domergue, spécialiste de la communication dans le secteur du luxe, s’est entourée d’experts pour créer le premier média consacré à l’actualité économique du Luxe et de la mode. Ce dernier attire tout particulièrement l’attention de ses lecteurs sur l’ensemble des acteurs majeurs de ces secteurs qui y partagent leurs expériences, visions et savoir-faire. Plus qu’un webzine spécialisé, Luxus Plus est un système d’information multi-sectoriel, devenu l’outil de veille de référence pour les professionnels du luxe et de la mode. Nos newsletters de veille contribuent en effet à sensibiliser nos lecteurs aux mutations qui touchent les industries du luxe. Grâce à une veille accrue et à une excellente connaissance du secteur, nous nous intéressons aux principaux enjeux économiques et technologiques de la mode, la haute horlogerie, la joaillerie, la gastronomie, des cosmétiques, parfums, de l’hôtellerie, l’immobilier de prestige…