Tiffany & Co stock price plunges 10% as the Louis Vuitton parent company LVMH pulls out of the deal

Tiffany & Co stock price plunges 10% as the Louis Vuitton parent company LVMH pulls out of the deal
Written by:
Michael Harris
4th June, 12:44
Updated: 4th June, 12:46
  • LVMH confirms media rumours and it says it is “not considering buying Tiffany shares on the market”
  • LVMH agreed to pay $135 per share in cash to acquire Tiffany in November
  • Tiffany stock price collapses 10% on the LVMH news

Shares of Tiffany & Co (NYSE: TIF) dropped more than 10% after LVMH Moët Hennessy – Louis Vuitton SE (OTCMKTS: LVMHF) said it is no longer interested in the $16.2 billion offer to buy Tiffany on the market. 

Fundamental analysis: LVMH pulls out of the deal

LVMH, the owner of brands such as Louis Vuitton, Céline, Givenchy and Marc Jacobs, has pulled out of the deal to buy the U.S. jewelry chain Tiffany & Co, the company said.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

“The Board of Directors of LVMH Moët Hennessy Louis Vuitton, met on Tuesday, June 2, 2020 and 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,” LVMH said. 

“Considering the recent market rumours, LVMH confirms, on this occasion, that it is not considering buying Tiffany shares on the market”.

LVMH agreed to pay $135 per share in cash to acquire Tiffany in November, however, it decided to pull out of the deal amid the deteriorating situation in the U.S. market. Before the French fashion giant pulled out of the deal, the deal was pending regulatory approvals.

Analysts believe that LVMH is still interested in making a deal, however, it still hasn’t decided which path it wishes to pursue. According to Reuters, LVMH is talking to its advisors to find a way to lower the agreed price of $135 per share in cash, but it still remains committed to striking a deal to acquire Tiffany. 

Technical analysis: Tiffany stock price plunges

Tiffany stock price is now trading around 10% lower since LVMH announced it is pulling out of the deal to acquire the U.S. – based jewelry giant. Shares of the company surged around 30% in October last year when the deal was first announced. 

Tiffany stock daily chart (TradingView)

The stock price is now approaching the key support near the $110 mark. This level hosts important horizontal support and the 100-WMA. The broken 200-DMA near the $120 handle will now transform into the resistance after it was broken on Tuesday. 

Summary

Shares of Tiffany collapsed 10% this week after LVMH announced it is no longer interested in buying Tiffany shares in the market. The French luxury goods group is still interested in making a deal, although it will try to secure a better price. 

Invezz uses cookies to provide you with a great user experience. By using Invezz, you accept our privacy policy.