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LVMH, Tiffany near agreement to reaffirm merger: sources

·1-min read
Sources said Tiffany and LVMH are close to a final agreement to resusciate their merger
Sources said Tiffany and LVMH are close to a final agreement to resusciate their merger

Tiffany has agreed to accept a lower price from LVMH in order to seal a merger that had been close to collapsing, two sources involved in the talks told AFP on Wednesday.

French luxury giant LVMH will pay $131 or $131.50 a share for the high-end jeweler instead of the $135 in the original takeover proposal, according to a preliminary agreement, said one of the sources. 

The other source said the final price would be $131.50, the amount proposed by Tiffany.

At $131.50, the price of the merger deal would fall to $15.96 billion, a drop of about $425 million based on Tiffany's share count in US securities documents.

The two parties are now happy with the agreement, said one of the sources, who added that the tie-up could close in January.

An announcement is expected later tonight from Paris-based LVMH.

Neither company responded immediately to requests for comment.

The parent to luxury brands such as Louis Vuitton, Dior and Moet & Chandon, LVMH announced its plan to acquire Tiffany and it's iconic robin's egg blue gift boxes at the end of 2019.

But the French company walked away from its proposal last month after claiming a series of poor decisions by Tiffany's board since the deal was unveiled late last year. 

Tiffany has said there was no valid basis to call off the deal and lodged a complaint in a Delaware court, while LVMH responded with a counter-claim.

The US court has set a trial date of January 5, 2021, while a judge in Delaware has urged talks between the parties to avoid litigation.

Tiffany shares rose 0.8 percent to $129.87 in early-afternoon trading.

jmb/hs