Author Topic: TIF - Tiffany & Co  (Read 10217 times)

fareastwarriors

  • Hero Member
  • *****
  • Posts: 3935
Re: TIF - Tiffany & Co
« Reply #20 on: June 05, 2020, 07:08:32 AM »
« Last Edit: June 05, 2020, 12:08:05 PM by fareastwarriors »


Dalal.Holdings

  • Hero Member
  • *****
  • Posts: 1222
Re: TIF - Tiffany & Co
« Reply #21 on: June 06, 2020, 06:25:37 AM »
https://www.wsj.com/articles/lvmh-reviews-tiffany-deal-amid-coronavirus-riots-11591284202
Dalal.Holdings has mentioned a break-up fee. I looked it up. It's USD 575 M, and mutual. I would personally be very surprised, if LVMH backs out from here. To me, if the situation evolves to litigation or arbitration, everything can happen. [I'm speculating/guessing.]

FYI from the WSJ article:

Quote
The merger agreement allows Tiffany to pay a termination fee of $575 million to walk away from the deal, but LVMH doesnít have the option of paying to back out.

Cigarbutt

  • Hero Member
  • *****
  • Posts: 2606
Re: TIF - Tiffany & Co
« Reply #22 on: June 06, 2020, 11:34:38 AM »
https://www.wsj.com/articles/lvmh-reviews-tiffany-deal-amid-coronavirus-riots-11591284202
So it seems that LVMH doesnít really have the legal right to walk away from the deal but they are hoping to get themselves a better price by claiming that Tiffany is violating the terms of the contract by tripping a debt covenant. Good luck with that...
The whole situation with this hung [<- ?] deal is interesting. I'm sure I'll learn something about Mr. Arnault - his personality and his modus operandi - from it. Some time ago in the "Tell me a joke..." topic about goats, ... used this expression about Mr. Arnaults personality : "... the subtle intricacies of the wolf in the cashmere coat's personality ...".
In short, Mr. Arnault didn't get to where he now is by being nice. He is extremely ambitious. Especially in his early years he was more some kind of corporate raider, where he also lost a few battles [Gucci and Hermes comes to mind]. He is a serial acquirer - a gem collector [<- pun intended].
- - - o 0 o - - -
Among Danes there exist a phrase used to express lack of trustworthyness at another person : "I wouldn't trade a second-hand car with him/her.".
So I've been thinking a bit about if I would trade a second-hand car with Mr. Arnault. Left that line of thinking quite quickly because it appeared highly hypothetical & of no relevance, because :
1. He has likely no interest in buying a second-hand car at all [the only second-hand things of interest to him are pieces af art],
2. He has likely no interest at all in a car that I can afford to buy, &
3. If I were to buy his second-hand car, I would likely not be able to without posting our home as collateral for some debt, which I have promised never to do again,
because he's not only a yacht owner, in fact he controls the shipyard, where his yacht is built. [ : - ) ]
- - - o 0 o - - -
Dalal.Holdings has mentioned a break-up fee. I looked it up. It's USD 575 M, and mutual. I would personally be very surprised, if LVMH backs out from here. To me, if the situation evolves to litigation or arbitration, everything can happen. [I'm speculating/guessing.]
So, let's call this educated speculation.
Like always, anything can happen but Mr. Arnault is long-term oriented, likes the color and the box and wants it. It may be reasonable that he tries to lower the bid to 125 or something but the deal is likely to go through.
It's interesting and maybe relevant (financing part) to take a look at the context when he took control (and eventually dismantled despite promises) of the Boussac Group (1981-5). The perilous transformation required essentially the formation of a company (it was mostly a textile company despite the hidden Dior and marketing companies gems) in liquidation carrying a very heavy debt load. Have you taken a look at the financing transactions (war chest) made since February of this year:
https://www.lvmh.com/investors/investors-and-analysts/debt-financing/
If he drops TIF, what would he do with all this cash (even after paying the breakup fee)?

Cigarbutt

  • Hero Member
  • *****
  • Posts: 2606
Re: TIF - Tiffany & Co
« Reply #23 on: August 20, 2020, 08:25:08 PM »
Tiffany's has amended debt agreements to obtain breathing room on covenants, has been obtaining regulatory approvals (with Europe and Australia to come, in October or before) and has declared its regular dividend today.
Also, related to the value of the luxury brand, a long legal fight with Costco (!) has made some progress recently.
https://www.thefashionlaw.com/tiffany-amp-co-and-costcos-7-year-fight-over-counterfeit-rings-will-be-one-to-watch-in-2020/
https://www.thefashionlaw.com/appeals-court-sides-with-costco-in-21-million-fight-over-counterfeit-tiffany-rings/
FWIW, i would tend to side with Tiffany's if chosen as a jury member but even if they lose the trial on the substance of the case, the fact would remain that the main value of Tiffany's is not what is inside the box but the box itself which is blue, or is it green? or uniquely iconic turquoise?

fareastwarriors

  • Hero Member
  • *****
  • Posts: 3935
Re: TIF - Tiffany & Co
« Reply #24 on: August 20, 2020, 11:21:32 PM »
Tiffany's has amended debt agreements to obtain breathing room on covenants, has been obtaining regulatory approvals (with Europe and Australia to come, in October or before) and has declared its regular dividend today.
Also, related to the value of the luxury brand, a long legal fight with Costco (!) has made some progress recently.
https://www.thefashionlaw.com/tiffany-amp-co-and-costcos-7-year-fight-over-counterfeit-rings-will-be-one-to-watch-in-2020/
https://www.thefashionlaw.com/appeals-court-sides-with-costco-in-21-million-fight-over-counterfeit-tiffany-rings/
FWIW, i would tend to side with Tiffany's if chosen as a jury member but even if they lose the trial on the substance of the case, the fact would remain that the main value of Tiffany's is not what is inside the box but the box itself which is blue, or is it green? or uniquely iconic turquoise?

New news or is this from early June?

Cigarbutt

  • Hero Member
  • *****
  • Posts: 2606
Re: TIF - Tiffany & Co
« Reply #25 on: August 21, 2020, 04:22:59 AM »
^This refers to the early June announcement but the merger agreement included not breaching the terms of the borrowing facilities so moving the goalposts in such a way could have been interpreted as such. At least so far, Tiffany's justification that it behaved as a prudent guardian of capital under the unusual circumstances (like so many others) doesn't look like it's being challenged.

John Hjorth

  • Hero Member
  • *****
  • Posts: 3261
Re: TIF - Tiffany & Co
« Reply #26 on: August 21, 2020, 04:38:30 AM »
And still resounding silence from Mr. Arnault since the "wool [<- kashmere?] in mouth" Press Release of June 4th 2020.
ĒIn the race of excellence Ö there is no finish line.Ē
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

fareastwarriors

  • Hero Member
  • *****
  • Posts: 3935
Re: TIF - Tiffany & Co
« Reply #27 on: August 24, 2020, 03:09:18 PM »
LVMH and Tiffany push back deal deadline by three months: source

https://www.reuters.com/article/us-tiffany-m-a-lvmh/lvmh-and-tiffany-push-back-deal-deadline-by-three-months-source-idUSKBN25K2AO

Under the deal terms, Tiffany and LVMH set Aug. 24 as the first deadline to complete, but with the proviso that one of the parties could push back that deadline as far as Nov. 24, according to a Tiffany filing to the U.S. Securities and Exchange Commission submitted earlier this year.

Tiffany is exercising the option to apply Nov. 24 as the ultimate deadline, according to the source.

An LVMH spokesman declined to comment. Tiffany was not immediately available to comment.

The deal between LVMH and Tiffany has yet to receive the regulatory approvals it requires, in particular from the European Union.

Cigarbutt

  • Hero Member
  • *****
  • Posts: 2606
Re: TIF - Tiffany & Co
« Reply #28 on: September 09, 2020, 04:06:03 AM »

Dalal.Holdings

  • Hero Member
  • *****
  • Posts: 1222
Re: TIF - Tiffany & Co
« Reply #29 on: September 09, 2020, 04:14:07 AM »
They mustíve used their connections in the French govít to give them room to renegotiate. Hope TIF walks away.