French retail mogul Bernard Arnault, the owner of luxury conglomerate LVMH, is Europe’s richest person and has been inching closer to becoming the world’s richest in recent years, thanks to our generation’s growing appetite for Louis Vuitton purses and Moët & Chandon champagne.
In July, Arnault briefly topped Bill Gates as the world’s second wealthiest person (after Jeff Bezos), when LVMH shares reached an all-time high on the Paris stock exchange. As of now, with a net worth standing at $97 billion (per Bloomberg’s real-time Billionaires Index), Arnault is only a few billion dollars away from Bezos and Gates. And he might surpass the two American tech magnets soon, if his luxury empire could add an iconic American brand under its belt: Tiffany & Co.
On Monday, LVMH confirmed that it has offered to buy Tiffany & Co. in an all-cash deal that will value the New York jeweler at $14.5 billion. Tiffany’s confirmed as well that it is reviewing a proposal from LVMH to take over the company for $120 a share, a 20% premium over its closing price last Friday.
If sealed, the deal will be LVMH’s largest acquisition since its $13 billion takeover of the Christian Dior brand in 2017.
LVMH will likely have to raise its offer even higher to convince Tiffany’s to sell. After news of the acquisition talk broke on Sunday, Tiffany & Co. shares soared 30% on Monday morning to $128 (above LVMH’s asking price), a signal that investors were expecting a better offer.
Cowen analyst Oliver Chen predicts that LVMH would need to offer at least $160 per share to secure a deal, according to CNN Business. LVMH’s rival luxury groups, such as Cartier owner Richemont, might also put in competing bids, he added.
Arnault owns about 46% of LVMH, according to Bloomberg. His ownership consists of a 5.9% direct stake in the conglomerate and a 40% stake through Christian Dior, which owns 41% of LVMH (Arnault owns 97.4% of Dior).
In addition, Arnault owns 8.6% in French luxury house Hermès and 1.9% in French supermarket chain Carrefour Market.