LVMH, the world’s biggest luxury group, said on Monday it had approached Tiffany (NYSE:TIF) about a possible takeover of the U.S. jeweler.
Shares of Tiffany surged $28.12, or 28.5%, in early trading Monday in response to the bid, to a price of $126.67
"In light of recent market rumours, LVMH Group confirms it has held preliminary discussions regarding a possible transaction with Tiffany," the company said in a statement. "There can be no assurance that these discussions will result in any agreement."
One source familiar with the matter said LVMH, which owns the Louis Vuitton and Bulgari brands among others, had proposed a bid valuing Tiffany at about $120 per share. That would be equivalent to a $14.5-billion acquisition offer — which would make it the acquisitive French group’s biggest purchase to date.
That would be a sharp premium to Tiffany’s current share price, which closed at $98.55 on Friday.
LVMH did not give any financial details.
Another source familiar with the situation said the French group had submitted a preliminary, non-binding offer to Tiffany earlier this month.
Tiffany has been caught out by the U.S.-China trade war as Chinese tourists spend less in U.S. shopping hubs.
That has pressured its sales in recent quarters, as it tries like its rivals to push further into mainland China to capture the shift in spending patterns as Chinese clients splurge more at home.
Still, jewelry is more broadly emerging as one of the brightest and fastest-growing spots in the luxury goods sector.
