Deal spirit

9 June 2020 By Lisa Jucca Follow @LJucca

The U.S. jeweler’s rejigged debt covenants allow it to fend off a possible LVMH attempt to lower a $16 bln bid. Still, a 45% sales slump shows Tiffany needs to marry its larger French suitor. Closing a deal amicably and quickly is best. It doesn’t mean LVMH boss Arnault will.

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U.S. jeweler Tiffany, the target of a $16.2 billion takeover bid by French luxury giant LVMH, on June 9 reported a 45% year-on-year drop in net sales to $556 million in the three months ended April 30, well below estimated first quarter revenue of $701 million in an analyst estimate provided by Refinitiv.

Comparable sales fell 43% from a year earlier.

Tiffany said it had amended conditions to certain debt facilities. The amendments modify the financial ratio thresholds established in its debt covenants.

LVMH said on June 4 its board had met to discuss the fallout of the coronavirus crisis on its planned purchase of Tiffany.

LVMH in November agreed to pay $135 a share in cash for Tiffany.

Shares in Tiffany were at $124.27 at 12:56 p.m. ET.

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