Tiffany Rises on Report It Called for Sweetened Bid From LVMH

(Bloomberg) -- Tiffany & Co. gained on a report that said the luxury jeweler asked LVMH to improve its $14.5 billion offer.

Tiffany says the offer “significantly undervalues” the company, according to Reuters, which cited unidentified people familiar with the matter. Tiffany could open its books and provide confidential due diligence with a better offer, the people told the news agency. LVMH is engaged and considering a new offer, Reuters reported, citing one of the people.

Tiffany and LVMH declined to comment.

Tiffany shares rose as much as 1.2% to $125.78 in New York. They had already gained 54% this year through Tuesday’s close.

LVMH, the French owner of luxury brands including Louis Vuitton and Hennessy cognac, sees 182-year-old Tiffany as an attractive asset because it would expand the company’s jewelry assortment and provide more access to U.S. shoppers.

In a sign the market sees LVMH’s $120-a-share proposal as too low, Tiffany’s stock has traded steadily above the offer price since Bloomberg News first reported the talks Oct. 26. Seven analysts tracked by Bloomberg have target prices of $130 or more for the New York-based jeweler.

LVMH, controlled by billionaire Chairman Bernard Arnault, has been riding a wave of luxury demand in China, but faces risks including the country’s trade war with the U.S. and the months-long anti-Beijing protests in Hong Kong. The company has been sharpening its focus on the U.S., its second-largest region by revenue behind Asia. In October, it opened a Louis Vuitton factory in Texas in a ceremony that included President Donald Trump.

Tiffany, meanwhile, has bounced back following a difficult period when it lost track of consumer trends and suffered from a slump in U.S. tourism. Chief Executive Officer Alessandro Bogliolo is overseeing a revamp of the company’s New York flagship store and making major investments to target younger shoppers.

--With assistance from Robert Williams.

To contact the reporters on this story: Jonathan Roeder in Chicago at jroeder@bloomberg.net;Kim Bhasin in New York at kbhasin4@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson

©2019 Bloomberg L.P.