$TIF rejects LVMHs $14.5B all-cash buyout offer ($120/share) & asks to raise its offer. Tiffany's said based on a higher offer it would allow LVMH the opportunity to examine its books & would provide confidential due diligence. Cowen analysts said that Tiffany deserved "an exceptional premium of 20x EBITDA or higher, or $160", citing "a host of potential rev & expense synergies that can be created from the acquisition." Credit Suisse analysts said a bid could "quickly reach $140/share" & still be 5% accretive to LVMH earnings in year 1. Oppenheimer analyst unwilling to make a case for a price much above $140, as at that level, a deal would be near $18B, implying an est'd 2020 enterprise-to-sales multiple of about 4x. UBS analysts said LVMH has an M&A firepower of ~ 40B euros. At $14.5B price = 14x EBITDA vs 20x-plus for Bulgari & Swatch’s Harry Winston deals. Tiffany would boost LVMH to luxury jewelry No. 1 ahead of Richemont & infill its Bulgari, Chaumet and Fred brands.
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