Louis Vuitton casts doubt over $16bn Tiffany takeover
- LVMH's billionaire chief executive Bernard Arnault had tiffany brand in his bucket list
- He agreed to pay $135 a share, but the price has sunk to about $114 a share.
- LVMH confirms, on this occasion, that it is not considering buying Tiffany shares on the market.
- LVMH's statement on Thursday comes ahead of Tiffany's quarterly results, due out next week.
- Arnault's $100.4 billion fortune now equals more than 3 percent of France’s economy.
The world's biggest luxury goods firm, LVMH, has retracted on its planned $16bn (£12.5bn) takeover of US-based jeweller Tiffany.
LVMH agreed to acquire Tiffany last November, but coronavirus-induced turmoil on financial markets caused a setback on the deal.
After days of speculation, LVMH said on Thursday that it is reconsidering buying Tiffany shares on the open market.
LVMH is home to many of the world's leading fashion houses, including Louis Vuitton—where Virgil Abloh is at the helm of menswear creative, Fendi, Celine (formerly known as Céline), Dior, Givenchy, and most recently, Rihanna's Fenty.
According to Bloomberg, the increased demand for Louis Vuitton handbags and Hennessy cognac from Chinese consumers have contributed to Arnault's ascendance to the centibillionaire club.
A slump in Tiffany's share price may have instigated doubts on the deal
Tiffany's share price tumbled in March on the back of expectation that sales of its luxury jewellery would fall. Although the stock recovered, it has fallen again this week on speculation LVMH's bid was in doubt.
How did the impact of COVID19 affect the purchase of Tiffany & Co
LVMH said that during its board meeting on Tuesday, the firm "notably focused its attention on the development of the pandemic and its potential impact on the results and perspectives of Tiffany & Co with respect to the agreement that links the two groups".
It added: "Considering the recent market rumours, LVMH confirms, on this occasion, that it is not considering buying Tiffany shares on the market."
LVMH has 75 brands, 156,000 employees and a network of more than 4,590 stores. Its brands include Louis Vuitton, Kenzo, Tag Heuer, Dom Pérignon, Moet & Chandon and Christian Dior.
Arnault's $100.4 billion fortune now equals more than 3 percent of France’s economy.