>>> What to look at today -28th of October 2020

U.S. equity futures fell with most Asian stocks as concern lingered about the impact of the worsening pandemic on economic activity in some parts of the world. The dollar rebounded against major peers.
Shares dropped in Japan and Hong Kong, while China and Australia edged up. S&P 500 futures retreated and European contracts were down about 1.5%. Microsoft Corp. shares slipped in extended trading as a forecast for revenue in some divisions fell short of the highest analysts’ projections.
China’s yuan was steady as traders digested news that the nation’s banks abandoned inclusion of a key factor used to calculate the currency’s daily reference rate. Treasury yields held steady.
US After Hours FSLR +11.5%, JNPR +5.2%, FEYE +5% up on earnings; MSFT -2%, AKAM -3.8% lower on earnings

Nikkei -0.29% Hang Seng -0.06% CSI +0.90% Shanghai +0.48% Shenzen +0.76%

Eur$1.1780 CNH 6.7081 CNY 6.7094 JPY 104.27 GBP 1.3044 CHF 0.9089 RUB 77.4069 TRY 8.1950 WTI$ 38.72 -2.15%

S&P -0.62% Nasdaq -0.45% EuroStoxx -1.69% FTSE -0.56% Dax -1.55% SMI

Macro :
- Hedge Funds’ Shot at Stock Secrecy Fades as SEC Drops Revamp
- David Einhorn Says Technology Stocks Are in ‘Enormous’ Bubble
- Italy’s Conte: New Measures Aimed at Avoiding New Lockdown

Keep an eye on :
- ADYEN NA : Fiserv Sales Beat, Forecast Raise --> +3% in after hours
- AENA SM : Aena 3Q Net Income EU63.1M
- AM1 FH : Ahlstrom-Munksjo 3Q Adjusted Ebitda Beats Estimates
- AML LN : Mercedes-Benz to Increase Stake in Aston Martin to Up to 20%
- AML LN : Aston Martin Turns to Mercedes for Help Steering Out of Crisis
- ARJOB SS : Arjo 3Q Adjusted Ebitda Beats Estimates
- ATL IM : Italy’s CDP Says Board Gives Go-Ahead on Autostrade Offer
- ATO FP : Atos Says Filed Motion Against Copyright Claims by Cognizant
- AXA NO : Axactor SE 3Q Ebitda Beats Estimates
- BKIA SM : Bankia 3Q Net Income Beats Estimates,
- BAS GY : BASF Confirms 3Q Results, 2020 Outlook
- BSLN SW : Basilea in Trial, Supply Pact With Lilly For Ramucirumab
- BEN FP : Beneteau FY Ebitda Beats Estimates
- BB FP : BIC Sees FY Normalized Ifo Margin Above 13.5%
- BOL SS : Boliden 3Q Adjusted Operating Profit Beats Estimates
- CARLB DC : Carlsberg Raises FY Outlook as 3Q Sales Beat Estimates (1)
- CA FP : Carrefour Beats as Working From Home Boosts Grocery Demand
- DAI GY : Mercedes-Benz to Increase Stake in Aston Martin to Up to 20% (1)
- DANSKE DC : Danske Bank Sees FY Net at DKK4-4.5B; Saw ‘at Least’ DKK3B
- DHER GY : Delivery Hero FY Revenue Forecast Beats Estimates
- DHER GY : Delivery Hero’s Quarterly Orders, Sales Double as Demand Surges
- DBK GY : Deutsche Bank Debt Traders Regain Market Share With 47% Surge
- DWS GY : DWS 3Q Net Inflows Beats Estimates, Deutsche Bank’s DWS Rakes in More Investor Cash Than Expected
- ERA FP : Eramet SA 3Q Sales EU850.0M
- EKT SM : Euskaltel 3Q Net Income EU16.6M
- RMS FP : Hermes Accuses Heir of Lying About Shares During LVMH Battle
- IDRA FP : Indra 3Q Net Income EU43.6M
- ITP FP : Interparfums Sees FY Sales EU320M to EU330M
- KCR FH : Konecranes 3Q Adjusted Ebit Beats Estimates
- KPN NA : KPN Sees FY Adj. EBITDA AL About EU2.32B, Est. EU2.38B
- MC FP : Hermes Accuses Heir of Lying About Shares During LVMH Battle
- MMT FP : M6 3Q Revenue Beats Estimates
- MDM FP : Maisons Du Monde 3Q Sales EU321.3M
- MELE BB : Melexis 3Q EPS Beats Estimates
- MOLN SW : Novartis, Molecular Partners to Develop Covid-19 Therapies
- MOR GY : MorphoSys Boosts FY Ebit Forecast
- NVG PL : Navigator Co 9M Net Income EU75.2M
- NEXI IM : Fiserv Sales Beat, Forecast Raise --> +3% in after hours
- NOFI NO : Norwegian Finans Holding 3Q Total Income Misses Estimates
- UG FP : Peugeot Maker PSA Sticks to Outlook After Sales Beat Estimates
- QIA GY : Qiagen Boosts FY Net Sales Forecast
- REE SM : Red Electrica 3Q Net Income EU175.3M
- REP SM : Repsol Approved to Return Shallow Water Oil Block to Mexico
- RILBA DC : Ringkjobing Landbobank 9M Core Earnings Fall to DKK852 Million
- SPM IM : Saipem 3Q Adjusted Ebitda Misses Estimates
- SCHA NO : Schibsted 3Q Operating Revenue NOK3.19B
- SW FP : Sodexo to Cut 2,083 Jobs in France as Covid Impacts Catering
- SOP FP : Sopra Steria 3Q Organic Revenue -5.9%
- STMN SW : Straumann 3Q Revenue Meets Estimates
- O2D GY : Telefonica Deutschland Confirms FY Outlook, 3Q Adj. Oibda EU595m
- TEP FP : Teleperformance to Buy Health Advocate from Intrado for $690m, Teleperformance to Resume M&A After Health Advocate Buy: CEO
- FR FP : Valeo 3Q Revenue EU4.39B, Valeo Raises 2H Guidance, Names Perillat CEO From Jan. 2022 (1)
- UPONOR FH : Uponor 3Q Adjusted Operating Profit Beats Estimates
- URW NA : Glass Lewis Recommends URW Holders Vote for Capital Increase
- VASTN NA ; Vastned Maintains FY EPS EU1.70 to EU1.85
- WLN FP : Fiserv Sales Beat, Forecast Raise --> +3% in after hours

Challenges : Lagardère: the division of the empire (Google Translate)

Lagardère: the division of the empire

SERIES # 5 - Where the scenarios multiply: takeover bid on Lagardère? Split? It is still too early for the big cats Vincent Bolloré and Bernard Arnault to swallow their ego.

The sequence alone describes the tension around Lagardère's capital. On September 25, Financière Agache, the family holding company of Bernard Arnault, announced, via a press release from the Autorité des marchés financiers (AMF), that it had acquired a 5.5% stake in Lagardère. Small wind of turmoil on the markets: Bernard Arnault had already spent 80 million euros, in May, for 26% of the personal holding of Arnaud Lagardère, holder of 7% of the Lagardère group. This two-level injection of capital could only disturb the company's main shareholders, starting with Vivendi. Five days later, the media and entertainment company majority owned by Vincent Bolloré announced that it had crossed the threshold of 25% of Lagardère's capital and held 26.7%.

The capitalist war has indeed started, even if it is impossible to know the real intentions of the belligerents as to the future of this group of more than 7 billion euros in turnover, present in the edition with Hachette, the media and travel retail (station and airport shops). All scenarios are possible.

By inflating his participation, Vincent Bolloré wanted to send a clear signal to the opposing camp: the position of Bernard Arnault, as central as it is, is far from being locked. For all intents and purposes, the owner of Vivendi made a point of informing the AMF on October 2 that he was in a position to acquire the 20% of the Amber Capital fund with which he entered into a shareholders' agreement, on August 10, including a reciprocal right of first refusal on their holdings in Lagardère. And that the prospect of a takeover bid for the entire capital, which would be imposed on him if he crossed the 30% threshold, did not frighten him. "Vivendi has a credit line of 10 billion euros," recalls a close friend of the Breton businessman. A war chest partly constituted at the beginning of this year, during the transfer of 10% of the capital of Universal Music Group to the Chinese Tencent. “We reserve all the possibilities and all the options, including the purchase of Amber and the takeover bid,” slips a Vivendi executive.

Amber and Qatar's game
A takeover bid? Arnaud Lagardère rejects the hypothesis. With Vincent Bolloré, they talk to each other from time to time. "He is the largest shareholder of Vivendi, owner of Editis and therefore our competitor in the book," he recalls. It would destroy a lot of value. The scenario cannot however be excluded. The Amber Capital fund is not intended to retain its holdings and does not hide it. He acquired them around 20 euros per share and would therefore make a nice capital gain, close to 200 million euros, over the 28 euros reached on October 7. By combining the holdings of Amber (20%) and those of Vivendi (26.7%), Bolloré would approach the majority of the shares. If he passed this 50% bar, he would de facto deprive Arnaud Lagardère of his majority on the supervisory board, causing a strategic and organizational blockage at the group level.

Still in a hostile hypothesis, will Vincent Bolloré count on a second ally in this capitalistic fight? The sovereign wealth fund of Qatar, holder of 13% of the capital and 20% of the voting rights. Rarely, on September 22, the Qatari fund publicly communicated believing it "legitimate for all shareholders to be fairly represented on the supervisory board", thus proving Amber and Vivendi right. In May 2017, when he had just increased his participation, he had already politely expressed the idea of ​​being represented. In vain.

The gesture of annoyance of the faithful and silent ally of Lagardère makes the business of Vincent Bolloré. On the evening of September 22, he announced to his relatives "good news", like a divine surprise. Present in the capital since 2006, Qatar has been dissatisfied with the return on its investment several times over the past three years. Member of the supervisory board since February, Nicolas Sarkozy, close to the Emir, convinced him to maintain his support for the heir Lagardère, during the last general meeting of the group in May 2020. But these old agreements no longer hold . Former reference shareholder of the group, today surpassed by Vivendi and the Amber fund, Qatar could ring the hour of retirement.

"The egos of two wild animals"
In private, neither party is engaging in belligerent comments. "The battle against Lagardère will not happen," even assures a Vivendi executive. Vincent Bolloré respects Bernard Arnault too much. Arnaud Lagardère confirms: "I don't think the two want to compete." In Vincent Bolloré's mind, the most reasonable solution

Challenges : Lagardère: le partage de l'empire

Lagardère: le partage de l'empire

SERIE #5 - Où les scenarii se multiplient: OPA sur Lagardère? Scission? Il est encore trop tôt pour que les grands fauves Vincent Bolloré et Bernard Arnault ravalent leur égo.

La séquence décrit à elle seule la tension autour du capital de Lagardère. Le 25 septembre dernier, la Financière Agache, holding familial de Bernard Arnault, annonçait, via un communiqué de l'Autorité des marchés financiers (AMF), être entrée au capital de Lagardère, à hauteur de 5,5%. Petit vent d'émoi sur les marchés: Bernard Arnault avait déjà déboursé 80 millions d'euros, en mai, pour 26% du holding personnel d'Arnaud Lagardère détenteur de 7% du groupe Lagardère. Cette injection de capital à deux niveaux ne pouvait que perturber les actionnaires de référence de l'entreprise, à commencer par Vivendi. Cinq jours plus tard, l'entreprise de média et de divertissement majoritairement détenue par Vincent Bolloré annonçait avoir franchi le seuil des 25% du capital de Lagardère et en détenir 26,7%.

La guerre capitalistique est bel et bien déclenchée, même s'il est impossible de connaître les intentions réelles des belligérants quant à l'avenir de ce groupe de plus de 7 milliards d'euros de chiffre d'affaires, présent dans l'édition avec Hachette, les médias et le travel retail (boutiques de gares et d'aéroports) . Tous les scénarios sont possibles.

En gonflant sa participation, Vincent Bolloré a voulu envoyer un signal clair au camp adverse: la position de Bernard Arnault, aussi centrale soit elle, est loin d'être verrouillée. A toutes fins utiles, le propriétaire de Vivendi a tenu à préciser à l'AMF, le 2 octobre, qu'il était en mesure d'acquérir les 20% du fonds Amber Capital avec lequel il a conclu un pacte d'actionnaires, le 10 août dernier, comprenant un droit de préemption réciproque sur leurs participations dans Lagardère. Et que la perspective d'une OPA sur l'ensemble du capital, qui s'imposerait à lui s'il franchissait le seuil des 30%, ne l'effrayait pas. "Vivendi dispose d'une ligne de crédit de 10 milliards d'euros", rappelle un proche de l'homme d'affaires breton. Un trésor de guerre en partie constitué au début de cette année, lors de la cession de 10% du capital d'Universal Music Group au chinois Tencent. "On se réserve toutes les possibilités et toutes les options, y compris l'achat d'Amber et l'OPA", glisse un cadre de Vivendi.

Le jeu d'Amber et du Qatar
Une OPA? Arnaud Lagardère balaye l'hypothèse. Avec Vincent Bolloré, ils se parlent de temps en temps. "Il est le premier actionnaire de Vivendi, propriétaire d'Editis et donc notre concurrent sur le livre", rappelle-t-il. Cela détruirait beaucoup de valeur. Le scénario ne peut pourtant être exclu. Le fonds Amber Capital n'a pas vocation à conserver ses participations et ne s'en cache pas. Il les a acquises autour de 20 euros l'action et ferait donc une jolie plus-value, voisine de 200 millions d'euros, au cours de 28 euros atteint le 7 octobre. En cumulant les participations d'Amber (20%) et celles de Vivendi (26,7%), Bolloré frôlerait la majorité des parts. S'il passait cette barre des 50%, il priverait de facto Arnaud Lagardère de sa majorité au conseil de surveillance, provoquant un blocage stratégique et organisationnel au niveau du groupe.

Toujours dans une hypothèse hostile, Vincent Bolloré comptera-t-il sur un deuxième allié dans cette bagarre capitalistique? Le fonds souverain du Qatar, détenteur de 13% du capital et 20% des droits de vote. Fait rare, le 22 septembre dernier, le fonds qatari a publiquement communiqué estimant "légitime que l'ensemble des actionnaires soient équitablement représentés au conseil de surveillance", donnant ainsi raison à Amber et Vivendi. En mai 2017, alors qu'il venait d'accroître sa participation, il avait déjà poliment émis l'idée d'être représenté. En vain.

Le geste d'agacement du fidèle et silencieux allié de Lagardère fait les affaires de Vincent Bolloré. Le soir du 22 septembre, celui-ci annonçait à ses proches "une bonne nouvelle", à la manière d'une divine surprise. Présent au capital depuis 2006, le Qatar s'est montré plusieurs fois insatisfait du rendement de son placement, au cours des trois dernières années. Membre du conseil de surveillance depuis février, Nicolas Sarkozy, proche de l'émir, a su le convaincre de maintenir son soutien à l'héritier Lagardère, lors de la dernière assemblée générale du groupe en mai 2020. Mais ces anciennes conventions ne tiennent plus. Ancien actionnaire de référence du groupe, aujourd'hui surpassé par Vivendi et le fonds Amber, le Qatar pourrait sonner l'heure de la retraite.

"Les ego de deux fauves"
En privé, aucune des parties ne se laisse aller à des propos belliqueux. "La bataille contre Lagardère n'arrivera pas", assure même un dirigeant de Vivendi. Vincent Bolloré respecte trop Bernard Arnault. Arnaud Lagardère confirme: "Je ne pense pas que les deux aient envie de s’affronter." Dans la tête de Vincent Bolloré, la solution la plus raisonnable déboucherait sur un compromis avec le PDG de LVMH, où l’empire Lagardère serait scindé en deux. Sur le papier, le partage paraît évident. A Bernard Arnault, qui possède des produits de luxe et des journaux, le commerce d’aéroports, le Journal du Dimanche et Paris Match. A Vincent Bolloré, reviendrait Europe 1, qu’il rêve de rapprocher de sa chaîne de télévision CNews. Et l’édition, l’activité internationale d’Hachette, en particulier.

Arnaud Lagardère obtiendrait des deux hommes d’affaires son désendettement et quelques dizaines de millions d’euros de dédommagement pour l’abandon volontaire de sa commandite. Réaliste? "S'ils étaient rationnels et froids, c'est ce qu'ils feraient, mais il faut compter avec les ego de ces deux fauves", assure un bon connaisseur du groupe Lagardère. Et encore faut-il que le fils de Jean-Luc Lagardère accepte son sort. Il se dit prêt à lâcher sa commandite un jour si le contexte le justifie, mais pas avec un pistolet sur la tempe. Une manière de l'amadouer repose sur un schéma imaginé par un de ces soutiens de toujours, très habile financier Vincent Bolloré échangerait ses titres dans Lagardère contre Hachette ; et par la suite, Lagardère annulerait ces 26% d'actions, ce qui permettrait au titre de continuer à grimper en Bourse, et à tout le monde (Arnault, Amber, Qatar…) de rentrer dans ses fonds . Un scénario écarté pour l'instant par Vivendi, qui ne veut pas donner le sentiment de chercher trop vite une porte de sortie.

Trois pôles de Lagardère dans le viseur

WSJ : Equitable Reaches Deal With Venerable to Reinsure $12 Billion in Annuities

Equitable Reaches Deal With Venerable to Reinsure $12 Billion in Annuities
Venerable says pact to reinsure 114,000 variable-annuity policies will double its total assets

Equitable Holdings Inc. will transfer financial risk for $12 billion of retirement-income annuities to reinsurer Venerable Holdings Inc., as life insurers continue to reduce exposures on their books in a challenging environment for turning profits.

The New York company has entered an agreement for privately held Venerable to reinsure a total of 114,000 variable-annuity policies sold between 2006 and 2008.

Variable annuities are investment products for conservative savers that provide a tax-advantaged form of investing in stock and bond funds. They typically are sold with guarantees of minimum lifetime income if the funds perform poorly.

The pact will double Venerable’s total assets, the company said. Venerable got up and running in 2017 with an agreement to buy various annuity portfolios of Voya Financial Inc.

The deal comes as many U.S. life insurers have been selling or reinsuring blocks of business to affiliates of private-equity companies that are developing expertise in managing the often-complicated products, including hedging the financial risks.

Equitable said the deal would free up $1.2 billion in capital, among other benefits. It said it would accelerate return of capital to shareholders, with $500 million of incremental share repurchases in 2021.

Equitable also said it is negotiating to buy a 9.9% equity stake in Venerable’s parent holding company, VA Capital Company LLC, and get a board seat.

Equitable said the deal involves about 13% of total variable-annuity business on its books as of June 30. The company said it remains committed to various types of variable annuities, even as these older ones are reinsured by Venerable

Mark Pearson, chief executive of Equitable, said in a release that the deal “strengthens our ability to focus on value-accretive businesses.”

Venerable was created by an investor group led by affiliates of Apollo, Crestview Partners, Reverence Capital Partners and Athene Holdings Ltd. Apollo, Crestview and Reverence each have 23% stakes. Athene has a 21% stake, and Voya has a stake just under 10%.

Apollo has been at the forefront of finding ways to acquire insurers’ annuity assets. After the financial crisis, it teamed with James Belardi, a former senior executive at American International Group Inc., to start Athene as an annuities specialist. Athene, which went public in 2016, now has more than $180 billon in assets.

In the years leading up to the 2008 financial crisis, insurers were in an arms race to offer more generous features on their variable annuities, and sales boomed. After stock markets declined sharply, those income guarantees caused large losses to insurers.

Insurers have been eager to divest the older blocks of business because they aren’t selling the same type of guarantees and have moved on to other products with less risky features and better profit potential.

Venerable’s “conservative investment approach, strong capitalization, focus on operating efficiency and deep expertise in managing risk has positioned us for this transaction,” said David Marcinek, Venerable’s chairman, in a release.

FT : Investors probe ESG credentials of bond sellers on ‘greenwashing’ fears

Investors probe ESG credentials of bond sellers on ‘greenwashing’ fears
Booming green debt market stokes concern over issuers’ environmental and social bona fide

The rapid growth of the green bond industry is fanning suspicions that some debt is environmentally friendly in name only, encouraging investors to ignore the label and focus on the credentials of the issuer instead.

The green bond market has grown from almost nothing a decade ago to roughly €660bn in outstanding debt today, and is forecast to hit €2tn by the end of 2023, according to research by NN Investment Partners this month. But the Dutch asset manager also found that 15 per cent of such bonds are issued by companies “involved in controversial practices that contravene environmental standards”.

As the trend for investing based on environmental, social, and governance (ESG) principles moves into the mainstream, fund managers are increasingly looking past the label to the entire business of the borrower — and questioning whether it makes sense to divide their activities into green and non-green portions. 

“We don’t buy a bond because it’s green, but because the company is,” said Tom Chinery, a corporate bond portfolio manager at Aviva Investors. “And when we meet with a company that is selling a green bond, the first question we ask is if they are doing anything they wouldn’t be doing anyway.”


Mr Chinery gives the example of car companies selling green bonds to fund development of electric vehicles. “To us that’s business as usual. Every car manufacturer on the planet should already be doing this,” he said.

In the headlong dash to sell green bonds, some issuers have raised eyebrows. Saudi Electricity Company, a state-owned monopoly in the oil-rich Gulf country, raised €1.3bn from a green bond sale last month to invest in the installation of smart meters across its grid.

Chris Bowie, a portfolio manager at TwentyFour Asset Management, said that if a bulk of an issuer’s business is in “dirty” industries, “and they are asking you to finance the clean bit, I’m not sure it’s really influencing them to change their behaviour.”

Mr Bowie added he would not hold Saudi assets in ESG-focused portfolios based on the country’s overall weakness on various ethical and sustainability metrics.

“You can see why some investors get quite cynical,” he said. “You are scratching your head thinking ‘really? How did they get that [bond deal] away?’ You can’t just tick boxes with these things.”

Green bonds issued by the Australian state of Queensland have also been targeted for what has been termed “greenwashing”. While the projects being funded by the bond are environmentally friendly, such as to preserve the Great Barrier Reef, the state’s massive coal business is not, said Ulf Erlandsson of the Anthropocene Fixed Income Institute, an advocacy group. 

“Queensland’s expansionary coal policy is directly in opposition to all you’re trying to achieve with the green bonds,” he said. “We declare that as a clear greenwash.”

Even if investors are happy with the issuer’s profile, they worry that green debt is simply a means to relabel investment that was already taking place, providing little incentive to the issuer to change its behaviour in service of fighting climate change. And if a government or business backslides on its commitments, bondholders typically have little power to hold them to account.

“Green bonds are a gentleman’s agreement saying that we expect an issuer to do what they say they’re intending to do with the money,” said Mr Erlandsson. “There’s usually no legal hardcoding in the bond contract saying that we have some legal recourse in case they don’t do what they’re supposed to do.”

In 2018, Mexico’s government decided to mothball a new airport being built in Mexico City, intended to be more energy-efficient, that was funded by green bonds. Although the project was cancelled, it did not trigger any sort of default on the debt. Some ESG indices have since expelled the bond, but it is still on the market — and investors just have to take Mexico’s word that the proceeds are being used for environmentally friendly purposes.

Some ESG investors are instead looking to “sustainability-linked” bonds and loans. Unlike green bonds, these products do not specify how an issuer should spend the money. Instead they reward the borrower when they improve on pre-determined metrics, such as reducing emissions, or punish them with higher interest payments if they miss those targets.


“There’s a lot less wiggle room,” said Joshua Kendall, ESG analyst at Insight Investment, highlighting the increased coupon for missed targets. “That is within the prospectus and that is legally enforceable so if an issuer doesn’t meet a sustainability target the investors will get a reward for that.”

These products are not perfect. Mr Kendall highlights the ESG scores provided by specialist providers such as Sustainalytics, which can be “a bit of a black box”. Investors “lack the sufficient information to know whether it’s a metric that is achievable, or stretching”, he added.

There have only been a handful of sustainability-linked debt issuances so far. But Mr Kendall believes the segment has the potential eventually to surpass the entire green bond market. “Businesses recognise that it isn’t just simply about building wind farms,” he added. “It’s about ensuring that their overall strategy is more sustainability aligned.”

WWD : Tiffany Stock Gains On Fresh Hopes For LVMH Deal

Tiffany Stock Gains On Fresh Hopes For LVMH Deal
The jeweler's stock has rebounded on reports that it would consider something more than $130 a share.

Shares of Tiffany & Co. shot up Tuesday on hopes that the company’s deal with LVMH Moët Hennessy Louis Vuitton could still be salvaged.

Tiffany’s stock, which has been largely trading between $115 and $123 this month, jumped 5 percent to $129 midday on multiple reports that the two sides were looking beyond their contentious legal battle and were back at the bargaining table.

Both CNBC and the Financial Times reported that the two sides were considering a deal somewhere above $130 a share — each dollar in the per share price equals just over $120 million in the total price of over $16 billion.

A spokesman for LVMH declined to comment and Tiffany could not immediately be reached.

If the two sides were to come to some agreement it would amount to something of a pandemic price cut on what would be LVMH chief Bernard Arnault’s biggest luxury deal ever.

LVMH approached Tiffany last year to start a takeover dance that quickly spilled out into the public.

But while Tiffany was ultimately wooed, with Arnault saying LVMH would “develop this jewel with the same dedication and commitment that we have applied to each and every one of our maisons,” the feeling seemed to change once the coronavirus clamped down on business.

LVMH said it was backing out of the deal in September and Tiffany accused the French giant of slow walking the regulatory process and simply playing for a better price.

The regulatory approvals are now in, but the two have been spitting legal fire at each other in the runup to a trial set to take place in Delaware court in early January.

FT : LVMH and Tiffany: couples therapy

LVMH and Tiffany’s $16.6bn soap opera
We told you it was always a price negotiation.

But like any good telenovela, the twists and turns of LVMH and Tiffany’s rocky engagement were irresistible to watch, no matter how predictable.

For months, we’ve been chronicling the fate of the French luxury conglomerate’s planned takeover of the US jeweller. So to kick off today’s DD, we thought we’d try our hand at a mini screenplay on how the merger drama played out. 

A wealthy patron (LVMH) falls for a diamond in the rough (Tiffany). The marriage is sealed after an intense courtship. Then, after all the documents are signed, the French luxury conglomerate begins to get cold feet. 

Things begin to unravel alongside the global coronavirus pandemic, and grow nasty pretty quickly. Outside parties, including the French government, get involved. The international media seizes upon the threatened divorce. And now, just before a courtroom showdown, the two sides finally come to their senses. (End scene)

That’s where we find ourselves after DD’s James Fontanella-Khan and Arash Massoudi and the FT’s Leila Abboud reported that the two are on speaking terms again, exploring the possibility of renegotiating their $16.6bn deal to avoid a court battle in January.


LVMH boss Bernard Arnault, otherwise known as “the wolf in cashmere”, has been angling for a price cut on his initial offer of $135 a share in cash for the US jeweller since the pandemic struck. The drama climaxed last month when the French billionaire threatened to walk away from the deal altogether, citing supposed French government demands. 

But the jilted Tiffany is willing to forgive and forget, according to DD’s sources, saying it will consider a revised price as long as it is above $130 a share, and LVMH will agree to close the deal without any further objections.

The French company says it is also open to discussing such terms. One person says the price will have to fall below $133 a share to sway the cashmere-clad Arnault back down the aisle.

Shares in Tiffany rallied nearly 5 per cent on the news, closing at $128.88.

Whether or not the nuptials are back on, the pair are unlikely to pop open the Moët & Chandon just yet. 

Analysts have predicted sales in the luxury sector could drop as much as 30 per cent this year, although third-quarter sales from LVMH and Hermès showed glimmers of recovery driven by Asian and US shoppers.

>>> US After Hours Summary: FSLR +11.5%, JNPR +5.2%, FEYE +5% up o

After Hours Summary: FSLR +11.5%, JNPR +5.2%, FEYE +5% up on earnings; MSFT -2%, AKAM -3.8% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CYH +13.8% (also names new CEO), FSLR +11.5%, SKY +10.6%, MSTR +9.9%, JBT +7.2%, RRR +6.7%, MKSI +5.3%, JNPR +5.2% (also says it will remain opportunistic with share buybacks), FEYE +5%, ENVA +4.5%, OKE +4.2%, CB +4.1%, ENPH +3.9%, OI +3.5%, FISV +3.3%, TEX +3.1%, SWI +2.8%, AFL +2.3%, EIX +1.6%, APAM +1.1%, NCR +0.7%, PPD +0.7%, VECO +0.6%, DENN +0.4%, FTV +0.3%, ARES +0.1%, FCPT +0.1%, THG +0.1% (also enters into $100 mln accelerated share repurchase agreement)

Companies trading higher in after hours in reaction to news: SRRK +17.3% (stock offering; intends to use funds to advance SRK-015), RMBS +0.9% (announces availability of a high-performance IPsec Packet Engine), VECO +0.6% (OSRAM Opto has qualified Veeco's Lumina MOCVD System for production of high-end LEDs), TRWH +0.2% (CZR to sell Tropicana Evansville to GLPI and TRWH for $480 mln), EXAS +0.1% (issues statement regarding draft colorectal cancer screening guidelines), TNC +0.1% (raises dividend), ROL +0.1% (approves 3:2 stock split and special dividend of $0.13/sh)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SUM -7.4%, TWOU -4.7%, CHRW -4.5%, AKAM -3.8%, HA -2.9%, ZYXI -2.8%, LSCC -2.6%, MASI -2.3%, MTDR -2.1%, MSFT -2%, UNM -2%, RARE -1.4%, GLPI -0.8% (also announces exchange agreements with CZR and TRWH), DXCM -0.7%, EGP -0.6%, EQR -0.4%, SF -0.4%, ACCO -0.3%, CSV -0.3%, FCF -0.2%, SYX -0.2%, BXP -0.1%, RNR -0.1%

Companies trading lower in after hours in reaction to news: EQT -3% (EQT to acquire Appalachia assets from CVX for $735 mln; also commences 20 mln share offering), ELY -2.7% (to combine with Topgolf; also guides Q3 above consensus), CVX -0.6% (EQT to acquire Appalachia assets from CVX for $735 mln), ACMR -0.5% (granted a US patent), AUPH -0.4% (announces initiation of trial evaluating antiviral activity of voclosporin in kidney transplant recipients with COVID-19), AAPL -0.4% (to launch current affairs series on Apple TV+ with Jon Stewart, according to Hollywood Reporter), FUBO -0.4% (to carry AT&T SportsNet in Pittsburgh tv territory), CCL -0.2% (Princess Cruises extends pause in Australian ops thru May 2021), AMGN -0.1% (announces participation of SLE clinical trial in the FDA complex innovative trial designs pilot program), TCBI -0.1% (new CEO)