TIF - Tiffany & Co

[Cigarbutt]

^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]

And still resounding silence from Mr. Arnault since the "wool [<- kashmere?] in mouth" Press Release of June 4^th 2020.

[fareastwarriors]

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]

New odds.

The wording just went from will take longer to won't be able to.

https://www.marketwatch.com/story/lvmh-moet-hennessy-says-it-wont-be-able-to-buy-tiffany-2020-09-09?mod=mortgage-rates

[Dalal.Holdings]

They must’ve used their connections in the French gov’t to give them room to renegotiate. Hope TIF walks away.

[John Hjorth]

TIF is now actually suing LVMH :

 

Tiffany & Co. Press Release [september 9th 2020] : Tiffany Files Lawsuit Against LVMH To Enforce Merger Agreement. [Link].

 

Talk to me about a deal going down the drain! [some lawyers in Paris and New York now likely sitting rubbing their hands : "Fees, fees, fees!!"]

[Spekulatius]

TIF is now actually suing LVMH :

 

Tiffany & Co. Press Release [september 9th 2020] : Tiffany Files Lawsuit Against LVMH To Enforce Merger Agreement. [Link].

 

Talk to me about a deal going down the drain! [some lawyers in Paris and New York now likely sitting rubbing their hands : "Fees, fees, fees!!"

 

Of course they are suing. This deal is done for, but TIF probably will get a little bit of cash out of it to settle. The undisturbed, pre COVID price of TIF is ~$85/ share if I see this correctly.

[BG2008]

TIF is now actually suing LVMH :

 

Tiffany & Co. Press Release [september 9th 2020] : Tiffany Files Lawsuit Against LVMH To Enforce Merger Agreement. [Link].

 

Talk to me about a deal going down the drain! [some lawyers in Paris and New York now likely sitting rubbing their hands : "Fees, fees, fees!!"]

 

More like rubbing their nipples and moaning "Oui, Oui, fees, fees" 

[wescobrk]

Market price of Tif is around $110 instead of the predeal price of $85.

Part of this is the Fed but is the market signaling they think a deal will still happen? Large delta from $85 and $110.

[Spekulatius]

TIF is now actually suing LVMH :

 

Tiffany & Co. Press Release [september 9th 2020] : Tiffany Files Lawsuit Against LVMH To Enforce Merger Agreement. [Link].

 

Talk to me about a deal going down the drain! [some lawyers in Paris and New York now likely sitting rubbing their hands : "Fees, fees, fees!!"]

 

More like rubbing their nipples and moaning "Oui, Oui, fees, fees"

 

Is this now value investor or merger arbitrage porn? The price of TIF seems to indicate that this is all foreplay.

[Dalal.Holdings]

Isn’t there a $575M termination fee? How much more does TIF want? They seemed to be reluctant sellers initially anyway...

 

Like the GE-Alstom deal: be wary of French deals...

 

Edit: seems like the $575M is only for TIF to exit, not the other way around—who negotiated this agreement?

[John Hjorth]

Dalal.Holdings,

 

Yes, to my best recollection that was the termination fee, and not pocket money. But from my reading of the agreement itself some time ago, I came personally to the conclusion that it was mutual [i may have misunderstood it.]. From reading the TIF Press Release of today, I would say that Mr. Arnault likely is in trouble here. I'm not sure what is actually up and down of this situation though, comparing with the simultaneous LVMH Press Release of today, which is a lot less specific.

 

What a mess.

[fareastwarriors]

French government request that LVMH delay Tiffany deal was only advice

 

https://www.reuters.com/article/us-tiffany-m-a-lvmh-france-exclusive/exclusive-french-government-request-that-lvmh-delay-tiffany-deal-was-only-advice-idUSKBN2602U4

[Cigarbutt]

https://www.lvmh.com/news-documents/press-releases/lvmh-intends-to-file-a-lawsuit-against-tiffany-as-a-result-of-crisis-mismanagement/

Souring relationship or new set up for negotiations based on an updated balance of power?

[John Hjorth]

https://www.lvmh.com/news-documents/press-releases/lvmh-intends-to-file-a-lawsuit-against-tiffany-as-a-result-of-crisis-mismanagement/

Souring relationship or new set up for negotiations based on an updated balance of power?

 

I'm not sure, Cigarbutt,

 

Personally, I read it as we now see "the Vincent Bolloré"-side of Mr. Arnaults personality! [ : - D]

[fareastwarriors]

What are the longs doing here?

 

It hasn't dropped much even with new news.

 

Market seems to think there will be another deal at similar (but slightly reduced) price?

[swropfef]

TIF is now actually suing LVMH :

 

Tiffany & Co. Press Release [september 9th 2020] : Tiffany Files Lawsuit Against LVMH To Enforce Merger Agreement. [Link].

 

Talk to me about a deal going down the drain! [some lawyers in Paris and New York now likely sitting rubbing their hands : "Fees, fees, fees!!"

 

Of course they are suing. This deal is done for, but TIF probably will get a little bit of cash out of it to settle. The undisturbed, pre COVID price of TIF is ~$85/ share if I see this correctly.

 

 

Hi, why do you think this deal is done for?

[John Hjorth]

TIF is now actually suing LVMH :

 

Tiffany & Co. Press Release [september 9th 2020] : Tiffany Files Lawsuit Against LVMH To Enforce Merger Agreement. [Link].

 

Talk to me about a deal going down the drain! [some lawyers in Paris and New York now likely sitting rubbing their hands : "Fees, fees, fees!!"

 

Of course they are suing. This deal is done for, but TIF probably will get a little bit of cash out of it to settle. The undisturbed, pre COVID price of TIF is ~$85/ share if I see this correctly.

Hi, why do you think this deal is done for?

 

Thank you for your post, swropfef, [-and a belated welcome to you here on CoBF!, btw!].

 

No matter what happens going forward, it'll certainly be interesting to observe!

[swropfef]

Thanks John. A bit more than just interesting to me, as I am long the stock and therefore need to know why ppl think the deal is done for. We will know more when LMVH files their suit.

 

br

[John Hjorth]

Wasn't there earlier today in this topic a post by fareastwarriors in this topic with a link to a Reuters piece about how the litigation is evolving [, which is now gone from here]?

 

- - - o 0 o - - -

 

I may have been hallucinating though, because of stress related to IRL stuff.

[Spekulatius]

TIF is now actually suing LVMH :

 

Tiffany & Co. Press Release [september 9th 2020] : Tiffany Files Lawsuit Against LVMH To Enforce Merger Agreement. [Link].

 

Talk to me about a deal going down the drain! [some lawyers in Paris and New York now likely sitting rubbing their hands : "Fees, fees, fees!!"

 

Of course they are suing. This deal is done for, but TIF probably will get a little bit of cash out of it to settle. The undisturbed, pre COVID price of TIF is ~$85/ share if I see this correctly.

 

 

Hi, why do you think this deal is done for?

 

Because the positions seem hardened and I don’t think Arnault is someone who flip flops.

[John Hjorth]

Because the positions seem hardened and I don’t think Arnault is someone who flip flops.

 

Thank you for elaborating here, Spekulatius,

 

The deal going south does not imply that Mr. Arnault has lost interest in acquiring TIF. [i'm speculating here.]

[fareastwarriors]

Wasn't there earlier today in this topic a post by fareastwarriors in this topic with a link to a Reuters piece about how the litigation is evolving [, which is now gone from here]?

 

- - - o 0 o - - -

 

I may have been hallucinating though, because of stress related to IRL stuff.

 

You're not hallucinating.  I did post a link to a Reuters piece but I deleted it a bit later.

 

Here's the repost.  :)

 

 

https://www.reuters.com/article/us-tiffany-m-a-lvmh/lvmh-tiffany-wrangle-over-court-dates-after-acquisition-turns-sour-idUSKBN268276

 

LVMH, Tiffany wrangle over court dates after acquisition turns sour

 

[fareastwarriors]

Because the positions seem hardened and I don’t think Arnault is someone who flip flops.

 

Thank you for elaborating here, Spekulatius,

 

The deal going south does not imply that Mr. Arnault has lost interest in acquiring TIF. [i'm speculating here.]

 

Investors still think a some kind deal will happen though? Undisturbed $TIF price was around 80s? We are still in 110-120 a share...

 

Or has the market moved so much that even with a deal, this price seems fair

[Cigarbutt]

Three scenarios:

1-LVMH is 'forced' to respect its already negotiated part of the deal, outcome: 135

Tiffany's case appears strong but Mr. Arnault is an artist. So odds of this seem relatively low.

2-LVMH obtains, somehow, a lower deal around 120-125

i think that's the most likely scenario because LVMH still likely wants Tiffany's and may be using the moot aspects of force majeure to obtain concessions.

3-The deal falls apart, outcome (depends on timing): stock gravitating down to 80-100

This is just part of the game now and may involve some kind of buyer's remorse although it seems this sub-component is unlikely as extravagance is part of LVMH's DNA. i'd say the market is quite optimistic about this deal, the timing of the deal if any (this could be a lengthy process) and Tiffany's underlying business at this point

 

The following includes a Seeking Alpha link whose analysis allocate a higher weighting to scenario 1 than my humble assessment and is mostly useful for the summary of the legal tangle. It also contains a Reuters link which depicts the kind of street fighter that Mr. Arnault really is. The second link is from a French publication, Marianne. The article is in French and that part is not really helpful but it contains, in an annex, supposedly, a translated copy of the letter sent by someone who is the equivalent of Secretary of State. The letter appears to be the result of a friendly command coming from a friend asking something that sounded like: I need an official letter linking a jewelry store acquisition to a national security threat. It's been done before. The letter, in itself however, does not change IMO the relative weights attributed between scenario 2 and 3.

https://seekingalpha.com/article/4374923-tiffany-louis-vuitton-hasnt-produced-original-letter-yet?li_source=LI&li_medium=liftigniter-widget

https://www.marianne.net/economie/lvmh-l-etrange-lettre-qui-permis-bernard-arnault-de-repudier-tiffany

 

 

The best trade would have been to short in late February. Now, this is low conviction and not convincing from a weighted return perspective. Famous last words.

 

Irrelevant addition:

American friends may be dismayed if they read Marianne more often. Typical media in the US have some kind of ideological leaning and tend to be consistent about it. Marianne is all over the place. Conventional vs unpredictable.