Luxury giant LVMH is examining the impact of the coronavirus pandemic on its $ 16.2 billion acquisition of Tiffany amid reports that it wants to renegotiate the deal.
The Paris-based conglomerate’s board of directors discussed this week how the virus crisis could affect Tiffany’s “results and prospects” regarding the companies’ November acquisition deal, LVMH said Thursday.
The Louis Vuitton owner also tried to quash rumors that he is considering buying Tiffany stock on the open market, where the historic New York jeweler’s stock price plummeted when the coronavirus hit retailers worldwide. Tiffany shares closed at $ 114.24 on Wednesday, about 15 percent below the $ 135 a share LVMH agreed to pay.
“Given recent market rumors, LVMH confirms, this time around, that it is not considering buying Tiffany shares in the market,” the company said in a statement. statement.
LVMH agreed to buy Tiffany months before the coronavirus spilled over into the retail industry by forcing stores to close worldwide. Tiffany shareholders approved the deal in early February, just a few weeks before the virus collapsed on global stock markets.
LVMH CEO Bernard Arnault has been looking for ways to pressure Tiffany to lower the share price of the acquisition amid the pandemic, Reuters reported on Wednesday. But Tiffany is reportedly not convinced that there is a legal basis to reopen the talks as she has followed the financial covenants set out in the deal.
LVMH, whose portfolio includes other fancy brands such as Fendi, Givenchy and Dom Perignon, also said it would not buy Tiffany shares on the open market in March, when Bloomberg News reported that the company raised the idea with the Tiffany board.
Tiffany did not immediately respond to a request for comment Thursday morning.