REUTERS: Owner of Louis Vuitton, LVMH, has approached Tiffany & Co with a $ 14.5 billion takeover offer, people are aware of this case at a time when an American luxury jeweler is struggling with the impact of tariffs on exports to China.
LVMH, which has been looking for ways to expand into the US market for years, submitted a preliminary, non-binding offer to Tiffany earlier this month, one source said.
An LVMH offer with a Tiffany value of around USD 120 per share has been added. The Tiffany stock trading ended on Friday for $ 98.55.
Tiffany hired advisers to review LVMH's offer, but she did not respond and is not certain that she will negotiate the contract, according to sources.
Sources asked for non-disclosure because the matter is confidential. LVMH and Tiffany declined to comment. Bloomberg News announced earlier on Saturday that LVMH is in talks with Tiffany.
LVMH, which is behind brands such as Fendi, Christian Dior and Givenchy, as well as Veuve Cliquot champagne, has been standing out as one of the best producers in the exclusive retail sector for several years, in which not all brands enjoy the same growing Chinese appetite for branded goods.
On the other hand, Tiffany wasn't that hardy. In addition to the tariffs caused by the trade war between the United States and China, the lower Chinese domestic sales tax also contributed to a double-digit decrease in sales to Chinese tourists in the United States and elsewhere.
High-end brands have also long relied on Hong Kong as a major shopping center attracting visitors from mainland China in particular, and four months of pro-democratic demonstrations are starting to gather.
However, earlier this month, LVMH, with market capitalization of EUR 194 billion (USD 215 billion), overtook its sales forecasts for the third quarter despite the unrest in Hong Kong. In August, Tiffany recorded quarterly earnings, which also surpassed analysts' expectations due to lower marketing costs.
Tiffany refreshes its offer with more affordable items such as pendants and earrings to appeal to millennia that attract cheaper competitors such as Danish Pandora A / S and Signet jewelers.
Based in Paris, LVMH is controlled by the Arnault family and is headed by Bernard Arnault, the richest man in France. Headquartered in New York and best known for its diamond engagement rings, Tiffany operates over 300 retail stores around the world.
(Report: Greg Roumeliotis in New York; Additional report: Sarah White in Paris; Editing: Marguerita Choy and Sonya Hepinstall)