Tiffany Plunges On Report LVMH Takeover “Uncertain”

In what may be the highest profile failed M&A deal to emerge from the coronacrisis, moments ago Women’s Wear Daily reported that the LVMH’s $16.2 billion takeover of jewelry icon Tiffany appears “uncertain”, adding that LVMH has called a meeting in Paris to discuss the deal.

From the report:

According to sources, members of the board of LVMH Moët Hennessy Louis Vuitton called a meeting in Paris Tuesday night specifically to discuss the matter amid a deteriorating situation in the U.S. market, Tiffany’s largest.

It is understood board members of the luxury giant are concerned about the impact of not only the coronavirus pandemic, which has claimed more than 100,000 lives in America and wreaked widespread economic damage, but also the growing social unrest over the death of George Floyd at the hands of Minneapolis police.

LVMH board members also voiced concerns about Tiffany’s ability to cover all its debt covenants at the end of the transaction, which was expected to be concluded mid-year.

While no firm decision was made at Tuesday’s meeting, “attendees sent a clear message that the acquisition should be reconsidered”, according to WWD.

TIF stock plunged 15% on the report before recovering some losses.

Will TIF be the latest blown M&A arb, and how many hedge funds that were still long the stock are about to have a catastrophic start to the month of June?