Why Did Tiffany and Co. Reject the Aquisition Offer

Abstract

Abstract: In 2019, the luxury goods market was marked by LVMH Moët Hennessy Louis Vuitton's attempt to acquire Tiffany & Co. Despite offering a premium over Tiffany's stock price, Tiffany rejected LVMH's proposals. This study explores the rationale behind Tiffany's decision, using Discounted Cash Flow and Relative Valuation methods to assess the company's valuation. These approaches suggested a valuation lower than LVMH's offers, implying Tiffany might have anticipated internal financial reforms or restructuring. Beyond financial metrics, strategic, cultural, and brand identity factors likely played a role in Tiffany's decision. While a merger could offer synergies, differences in strategic visions and brand positioning might have influenced Tiffany's refusal of the acquisition.