French luxury group LVMH Moët Hennessy Louis Vuitton SE (OTC: LVMUY) whose interests span from watches and jewelry to wine and spirits is reconsidering its decision to buy Tiffany & Co. (NYSE: TIF) due to the deteriorating situation in the United States market.
The $16.2 billion takeover of Tiffany by LVMH is mired in uncertainty as concerns mount over the impact of the coronavirus pandemic and the resultant economic damages as well as internal unrest in the U.S. over the killing of George Floyd at the hands of the police, reported WWD, a fashion trade publication.
A board meeting of the LVMH was held in Paris on Tuesday night to discuss the takeover amid the worsening situation in the U.S., which is Tiffany’s largest market.
Tiffany shares slumped by nearly 9% after the news.
Why It Matters
Board members raised concerns about the ability of Tiffany to cover its debt covenants post-takeover due to be completed mid-2020, reported WWD.
The board of LVMH remains undecided on completing the takeover deal, but members were of the view that the deal should be reconsidered.
Tiffany shareholders have approved the deal in February. Last November, LVMH had agreed to acquire the jeweler for $135 a share.
On Tuesday, Tiffany shares closed lower by 8.93% at $117.03. LVMH OTC shares closed 1.41% higher at $86.39.
Image Credit: Wikimedia.
See more from Benzinga
- Amazon Plans 'Biggest Sale In The Sky' In June To Support Sellers Affected By Pandemic
- Zuckerberg Tells Facebook Employees He's Not Going To Moderate Trump
- China To Build B Mega Petrochemical Project In Its Shandong Province Oil Hub
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.