US jewelry giant Tiffany’s saw their shares take a plunge as reports of the LVMH takeover of the brand may not go through.
The unstable market scenario of the United States, which was triggered by months of lockdown followed by civil unrest and several violent protests in the wake of George Floyd’s murder by Minneapolis Police Department, has opened questions of uncertainty of the future of Tiffany’s in the US, which is its biggest market.
By the end of last year, LVMH had announced that the luxury conglomerate will be taking over the iconic American jeweler in a whopping US $ 16.2 billion deal which was evaluated at US $ 135 per share. However, the current market situation has forced LVMH to reconsider the deal.
Talks of potential renegotiation have surfaced which may be due to investor’s concerns over the worsening situation along with the fear of overpaying the jewelry brand.
Tiffany’s, on the other hand, said that there was no legal obligation for the company to open renegotiation as the deal had already been signed off, according to sources.
If the outcome of LVMH’s renegotiation resulted in Tiffany’s opting out of the deal, it would be even harder for LVMH to acquire the brand in the future.