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French luxury group LVMH offers to buy American jeweler Tiffany: sources



(Reuters) – Louis Vuitton owner LVMH ( LVMH.PA ) has approached Tiffany & Co ( TIF.N ) with an offer to buy, people know of the case on Saturday, at a time when the American luxury jeweler is taking a toll on customs' impact on exports to China.

FILE PHOTO: A Tiffany & Co logo is seen outside the store on 5th Ave in New York, New York, USA, March 19, 2019. REUTERS / Carlo Allegri

LVMH, which for years has been looking for ways to expand in The US market delivered a tentative, no-obligation offer to Tiffany earlier this month, said one source.

Tiffany has hired advisers to review LVMH's offer, but has so far not responded to it, and there is no certainty that it will negotiate a deal, one source added.

The exact price LVMH offered to buy Tiffany, which has a market value of $ 11.9 billion, could not be learned.

The sources asked not to be identified because the case is confidential. LVMH declined to comment, while Tiffany did not immediately respond to a request for comment. Bloomberg News reported earlier on Saturday that LVMH had talks with Tiffany.

LVMH, which stands behind brands such as Fendi, Christian Dior and Givenchy, as well as Veuve Cliquot champagne, has emerged for several years as one of the best performers in the exclusive retail sector, where not all labels benefit to the same degree from flourishing Chinese appetite for brands.

However, Tiffany has not been as resilient. In addition to the tariffs triggered by the US-China trade war, a lower Chinese domestic sales tax has also contributed to double-digit reductions in sales to Chinese tourists in the United States and other destinations.

High-end brands have also long relied on Hong Kong as a major shopping hub that draws visitors from mainland China in particular, and four-month demonstrations of pro-democracy are starting to take their toll.

However, LVMH, which has a market capitalization of 194 billion euros ($ 215 billion), earlier this month beat third-quarter sales forecasts despite the Hong Kong turmoil. In August, Tiffany reported quarterly earnings, which also beat analysts' expectations, thanks to a fall in marketing costs.

Tiffany has refreshed its offerings with more affordable goods such as pendants and earrings, to appeal to millennials who have gravitated to competitive prices such as Denmark's Pandora A / S ( PNDORA.CO ) and Signet Jewelers ( SIG.N ).

LVMH, headquartered in Paris, is managed by the Arnault family and is led by Bernard Arnault, France's richest man. Based in New York and best known for its expensive diamond engagement rings, Tiffany operates more than 300 retailers globally.

Report by Greg Roumeliotis in New York; Additional reporting from Sarah White in Paris; Editing by Marguerita Choy and Daniel Wallis

Our Standards: The Thomson Reuters Trust Principles.

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