LVMH does not rule out raising Tiffany bid: sources

[NEW YORK] French luxury giant LVMH has not ruled out raising its initial US$14.5 billion offer to take over US jewelers Tiffany, sources close to the deal told AFP on Friday.

The two groups resumed their stalled talks this week after Tiffany's board asked LVMH to reconsider its bid, which the sources said Tiffany believed was too low.

The owner of Louis Vuitton, Dior and Moet & Chandon revealed late last month it was exploring a takeover of Tiffany, most famous for its fine diamonds and luxury silver wedding and engagement rings.

The deal would be among the largest ever for LVMH, giving it a much bigger presence in the United States.

"Raising the price is more than feasible," said one of the sources.

A second source, however, said it was unlikely the new offer would stretch as far as the US$135-US$140 per share sought by Tiffany's board.

LVMH's initial offer was for US$120 per share, which values the company at around US$14.5 billion.

If LVMH raises its offer, however, the sources said Tiffany would be prepared to enter exclusive negotiations with the French group - which would give LVMH access to the accounts of its target.

Both sides were said to be eager to reach a deal.

Contacted by AFP, LVMH did not wish to comment. Tiffany did not initially respond to a request for comment.

Tiffany, founded in 1837 and headquartered on glamorous 5th Avenue in New York next to Trump Tower, is the most iconic of US luxury brands, an image reflected in the "Breakfast at Tiffany's" novella by Truman Capote, made into a film with Audrey Hepburn in 1961.

AFP