Tiffany is known for not holding sales, and it now appears it won't have to knock down its own price tag, either. LVMH had been deliberating whether to renegotiate its $16.2 billion purchase of the iconic jewelry chain. Sources told Reuters Friday that the French luxury goods giant has decided not to do so after considering the legal hurdles involved.
Relieved investors drove Tiffany shares roughly 8% higher in Friday morning trading to over $123 a share.
That's a lot lower than the cash price LVMH had agreed to pay: $135.
LVMH CEO Bernard Arnault had been talking to advisers to identify ways to pressure the American retailer to lower its price. He considered whether he could argue that Tiffany had breached its obligations under the merger deal.
LVMH had agreed to buy Tiffany in November, but several months later, the luxury retailer's business got hammered as people stayed home and stopped traveling. it's unclear whether LVMH will revisit the issue before the deal closes, especially if Tiffany’s financial condition were to deteriorate.
Investors will soon find out how Tiffany fared. It was supposed to release earnings Friday but it has pushed back its earnings report to Tuesday.