|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||400.80 - 407.10|
|52-week range||242.30 - 407.85|
|Beta (3Y monthly)||1.00|
|PE ratio (TTM)||30.65|
|Earnings date||27 Jan 2020 - 31 Jan 2020|
|Forward dividend & yield||6.20 (1.53%)|
|1y target est||319.92|
(Bloomberg Opinion) -- In recent years, several prominent economists have brought attention to the problem of growing inequality. These scholars include Thomas Piketty, author of the best-selling book “Capital in the Twenty-First Century,” and Emmanuel Saez and Gabriel Zucman, who in a new book chronicle the rise in American wealth inequality. All three embrace the same solution: much higher taxes. Piketty has declared that billionaires should be taxed out of existence, and he called for a global wealth tax, while Saez and Zucman helped Democratic presidential candidate Elizabeth Warren design her proposal for a U.S. wealth tax. Piketty and Saez have also suggested taxing top incomes at a rate of more than 80%.Other economists have struggled to evaluate dramatic proposals like this. Studies on the effects of taxation when rates are moderate might not be a good guide to what happens when rates are very high. Economic theories tend to make a host of simplifying assumptions that might break down under a very high-tax regime. Historical experience is of some help, because the U.S. had very high top income taxes in the 1950s, but economic conditions could be very different now.One way to predict the possible effects of the taxes is to look at a country that tried something similar: France, where Piketty, Saez and Zucman all hail from.During the past few decades, as income inequality rose in most rich countries, it stayed relatively constant in France. The biggest reason is government redistribution in the form of taxes and social-welfare spending. France leads its rich-country peers, including the legendarily egalitarian Scandinavian countries, on both measures:France, therefore, shows that inequality, at least to some degree, is a choice. Taxes and spending really can make a big difference.But there’s probably a limit to how much even France can do in this regard. The country has experimented with both wealth taxes and very high top income taxes, with disappointing results.France had a wealth tax from 1982 to 1986 and again from 1988 to 2017. The top rate was between 1.5% and 1.8%, with the total tax rate on fortunes larger than 13 million euros ($14.3 million) hovering at about 1.4%. This is much less than the 6% top rate proposed by Warren (not to mention the 8% proposed by her fellow candidate, Senator Bernie Sanders), but it's close to the 2% rate Warren would impose on fortunes larger than $50 million.The wealth tax might have generated social solidarity, but as a practical matter it was a disappointment. The revenue it raised was rather paltry; only a few billion euros at its peak, or about 1% of France’s total revenue from all taxes. At least 10,000 wealthy people left the country to avoid paying the tax; most moved to neighboring Belgium, which has a large French-speaking population. When these individuals left, France lost not only their wealth tax revenue but their income taxes and other taxes as well. French economist Eric Pichet estimates that this ended up costing the French government almost twice as much revenue as the total yielded by the wealth tax. When President Emmanuel Macron ended the wealth tax in 2017, it was viewed mostly as a symbolic move.Another French experiment was the so-called supertax, a 75% levy on incomes of more than 1 million euros. Introduced by socialist President François Hollande in 2012, the supertax added to the exodus of wealthy individuals, most notably actor Gerard Depardieu and Bernard Arnault, chairman of LVMH Moet Hennessy Louis Vuitton. Star soccer players threatened to go on strike, and there was fear that France would become a wasteland for entrepreneurs. Meanwhile, the supertax raised much less money than even the wealth tax had -- only 160 million euros in 2014. The unpopular tax was repealed two years after its adoption.France’s experiments with taxing the wealthy at very high rates didn’t raise much money and didn’t prove politically sustainable. The flight of wealthy individuals from the country probably helped reduce inequality on paper, but it's not clear that their departure left France better off.It’s possible that similar tax experiments in the U.S. might be more successful than in France. The U.S. economy is much larger than France’s; although a French business owner who moves to Belgium can still do business and move about freely within the European Union, an American mogul who moves to Canada might find access to one of the world’s largest markets restricted. That might allow the U.S. to raise more money from high taxes than France ever could.But it’s also worth noting that France’s wealth tax and supertax ultimately weren’t that important. Despite repealing the supertax, France managed to increase government revenue and to reduce inequality. The end of the wealth tax will probably be a similar story. France simply didn’t need these flamboyant taxes on the rich to have very high levels of taxation and social spending. That means the U.S. probably doesn’t need them either. Tax increases across the board -- on top incomes, capital gains, estates, pass-through businesses, corporations, and so on -- might not excite populist firebrands, but they’re probably a more effective strategy for fighting inequality.To contact the author of this story: Noah Smith at email@example.comTo contact the editor responsible for this story: James Greiff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- It’s now easier than ever to get your hands on a used Louis Vuitton tote or Gucci belt bag for cheap. But the rise of the online resale market in luxury goods needn’t have executives of high-end fashion houses shaking in their Christian Louboutin boots.In fact, it’s a model that could actually help an industry that thrives on scarcity and exclusivity, especially if designers use this emerging channel to their advantage.One reason is that the growth of the luxury resale market, popularized by such sites as the RealReal Inc., Poshmark and Vestiaire Collective, is poised to outstrip that of the broader market. The Boston Consulting Group and Altagamma estimate that it will expand by an average of 12% per year through 2021, compared to about 3% for the primary luxury market.While prices on the resale market tend to be lower than retail, they’re not so much lower that they appeal to a totally different customer. Jamie Merriman, an analyst at Bernstein, found that the median price of a Louis Vuitton bag on The RealReal was $1,025. That’s a deal compared to the median $3,000 price her analysis found for new Louis Vuitton purses. But that still leaves the brand in a vastly different tier than, say, Coach or Michael Kors, whose new bags might cost $300 to $400. (It’s near enough that it may tempt some shoppers to trade up — but that’s only a worry for accessible luxury brands.)In some cases, the prices fetched on the secondhand market might only add to a label’s mystique and cachet. Rare Hermés Birkin bags can sell on sites such as RealReal for higher prices than new ones do.Perhaps more important, though, is the way that secondhand sites can change the calculus of buying a new luxury piece in the first place. Say you’re considering a classic Balenciaga City bag for about $2,000. Is it worth the investment? A scroll around RealReal shows that you might be able to resell it for about $600. That could be exactly the kind of assurance a first-time millennial or Generation Z luxury buyer needs to take the plunge on a pricey accessory. None of this is to say that the luxury powerhouses shouldn’t get into the burgeoning resale market themselves. Some already are. At A.P.C., a French fashion house, customers can apply to trade in their worn jeans. If accepted, they can buy a new pair at half price. (The old jeans are then resold, but not before they have been washed, repaired and marked with the initials of the former owners.)Another option would be to acquire secondhand platforms, as Cie Financiere Richemont SA did with Watchfinder last year. But this could create challenges, particularly when it comes to authenticating other brands’ products. That’s why cooperation between luxury brands and resale sites looks like the more likely and logical approach.Burberry Group Plc, has begun a partnership with the RealReal in which U.S. customers who consign its goods can get a personal shopping session and tea at one of its boutiques. In Europe, Vestiaire Collective has a tie-up with French contemporary brands including Sandro and Maje, owned by SMCP SA, under which customers selling these retailers’ products are rewarded with a 10 euro voucher to spend on their new collections.Such relationships allow the brands themselves to engage with shoppers who are participating in the secondhand market. They also allow these companies to market themselves as champions of sustainability and recycling.Luxury adviser Mario Ortelli of Ortelli & Co. says cooperation between fashion houses and secondhand sites could run even deeper as the market develops. Brands could play a bigger role in authenticating their products for resellers, for example. Another idea: Fashion labels could use data from resale sites to inform their merchandising decisions.So there is good reason for the luxury giants to play nice with the resale sites right now — but they should be clear-eyed about the possibility that industry dynamics may eventually change. If these startups end up struggling to keep counterfeit products off their marketplaces, for instance, that would be a reason for the luxury brands to distance themselves. For now, however, the big bling empires shouldn’t fear their handbags and dresses getting a second life.To contact the authors of this story: Sarah Halzack at email@example.comAndrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael Newman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
* Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. As Europe's Q3 earnings season is drawing to its end, for Morgan Stanley, it's time to make their final conclusions. * Net beat: "37% of companies have beaten EPS estimates by 5% or more, while 28% have missed.
* Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Nigel Farage's decision not to field Brexit Party candidates in 317 Tory constituencies may very well a game changer for Boris Johnson in the upcoming Dec 12 general election.
* Greggs lifts guidance, shares up 14% Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Copley Fund Research, which monitors funds managing a total $1.2 trillion of assets, had detected signs that global equity fund managers are starting to bet on a "European resurgence".
* Greggs lifts guidance, shares up 14% Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. ARE YOU STILL UNDERWEIGHT EUROPE? It looks like the tide is finally starting to turn for Old Europe after long being relegated to a corner in asset allocation choices.
* Wall Street opens higher Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Thyagaraju Adinarayan. 9 little points is all it would take to bring the STOXX 600 to its highest level ever and join Wall Street in the fun of fresh milestones and "record high" headlines. With upbeat trade optimism lifting stock markets across the planet, it's absolutely possible this will happen tomorrow (unless writing this just jinxed it!).
* Wall Street opens higher Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Thyagaraju Adinarayan. Natixis chief economist Patrick Artus makes an interesting argument about the two-decade long stellar outperformance of Wall Street over Europe, saying it's "an illusion".
* Wall Street opens higher Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Thyagaraju Adinarayan. ARE UK RETAIL INVESTORS DRIFTING AWAY FROM THE TORIES? No surprise here: one wouldn't exactly expect UK retail stock investors to massively support Labour.
Tiffany's board decided that LVMH's $120-per-share, all-cash bid was too low to become the basis for negotiations, the sources said. Tiffany informed LVMH it could open its books and provide confidential due diligence if the French luxury group sweetens its offer, the sources added. LVMH remains engaged and is considering a new offer, according to the sources.
Tiffany's board decided that LVMH's $120-per-share, all-cash bid was too low to become the basis for negotiations, the sources said. Tiffany informed LVMH it could open its books and provide confidential due diligence if the French luxury group sweetens its offer, the sources added. LVMH remains engaged and is considering a new offer, according to the sources.
When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose...
(Bloomberg Opinion) -- Like expensive gems, luxury goods companies have scarcity value. If Bernard Arnault’s LVMH Moet Hennessy Louis Vuitton SE is allowed to get its hands on Tiffany & Co., the American jeweler is unlikely to come up for sale again. That’s something LVMH’s biggest rivals, Kering SA and Cie Financiere Richemont SA, might want to consider carefully.Financially they could both afford to make counterbids for Tiffany. An offer from either Cartier-owning Richemont or Gucci-owning Kering at the $120 per share price proposed by Arnault would lift their net debt to about 2.5 times Ebitda. That’s not too much of a stretch. Kering also has a 15.7% stake in sportswear maker Puma, worth about $1.8 billion, which it could reuse on something more promising.Both companies are no doubt extremely wary of taking on someone with such deep (and well-tailored) pockets as Arnault. But it’s a hard fight to sit out. Of the two, Richemont has most to lose from an LVMH-Tiffany tie up. The combined Franco-American group would take the Swiss giant’s position as the global leader in luxury jewelry, according to Bloomberg Intelligence.Arnault has a track record of turbocharging the brands he adds to his stable. Take the jeweler Bulgari, which has more than doubled its revenue since being bought by LVMH in 2011, according to analysts at Royal Bank of Canada. If LVMH repeated that trick with Tiffany, it would seriously challenge Richemont’s flagship Cartier brand.It would be a leap for Richemont to take on a lot more debt, especially when it’s still integrating the acquisition of online retailer Yoox Net-a-Porter and is developing a web joint venture with Alibaba Group Holdings Ltd. But these distractions might explain Arnault’s tactics in striking now for Tiffany.As for Francois-Henri Pinault’s Kering, it has lived with higher leverage in the past, although it tried to stick within a range of 1-2 times Ebitda. It certainly has room to expand in jewelry. Along with watches, the category accounted for just 6.8% of its sales in 2018. But many of Tiffany’s products are in the so-called “accessible” luxury segment (sometimes priced at about $1,000 or below), which Kering has been moving away from. The French group got rid of most of its stake in Puma last year to focus on the high-end stuff.Another problem for both rivals is that any counterbid would have to be above the $120 per share on the table, and would probably provoke a response from Arnault. The final purchase price would be even more of a stretch. LVMH has a “balance sheet war chest” of more than $20 billion, according to Deborah Aitken of Bloomberg Intelligence.Of course, a competing bid could be funded partly with shares, but Tiffany might well prefer cash.If Richemont and Kering can’t be enticed, the American company will have to persuade LVMH that it’s worth more without the help of an interloper bidding up the price. With its sales going in the wrong direction that looks difficult. But auction or not, it’s Tiffany’s job to make Arnault pay up.\--With assistance from Chris Hughes.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Second-hand luxury marketplace The RealReal, Inc. showed progress in important metrics that point to profitability on the horizon in its third quarter results, IPO Edge Editor-in-Chief John Jannarone told Cheddar TV in an interview Monday evening. Importantly, the company showed an increase in sales per order, which suggests customers are buying both more items and […]
(Bloomberg Opinion) -- The internet came to life 50 years ago this week, with a simple message sent from the University of California, Los Angeles to the Stanford Research Institute. The system crashed only two characters into the transmission of the word “login”: SRI received only “lo” — “as in ‘lo and behold!’” in the words of UCLA’s Leonard Kleinrock. The UCLA terminal operators’ logbook, with its record of “Talked to SRI host to host,” is the internet’s birth certificate. Five decades later, half the world uses the internet. It took almost the entirety of human existence for half the world’s people to live in cities. It took 27 years for the global population on the internet to grow from less than 1% to more than 50%. It’s hard to imagine contemporary government, finance or media running without the internet. The internet, and with it the process of digitizing businesses and economies, is now a matter of national focus in dozens of countries. Earlier this year, my BloombergNEF colleagues analyzed 40 national industrial digitization strategies. They then ranked countries based on the ambition of their digital efforts, the alignment of public- and private-sector goals, and the capital, workforce and technology employed to digitize at greater scale. Of the top 10, four countries are Asian, and four are European. BloombergNEF’s analysis identifies key commonalities between the countries that have been most successful in using internet-enabled technologies, such as the internet of things and artificial intelligence to make domestic industries more globally competitive. The most successful models align private-sector goals with national digital policies that focus on a few strategic areas. Digitization is not just for wealthy economies (the top 10 include Singapore, with a per capita GDP of $94,000, and China, with a per capita GDP of $17,000), but the skills gap is a concern everywhere. And every country fears falling behind in artificial intelligence strategies, even the perceived leaders such as Germany, the U.K. and Israel. There’s another thing that worries newly digitizing countries: information and communications technology infrastructure. For most of the emerging markets BloombergNEF analyzed, building the infrastructure to allow connectivity and internet access is the crucial first step. That ICT backbone, as BloombergNEF calls it, is not just as important as reliable electricity, but it’s also inextricably linked to it in developing countries. Highly distributed, increasingly renewable power in emerging markets depends upon ICT to integrate with the electricity network and carry out transactions between buyers and sellers off the grid. That same ICT network depends upon reliable power to operate. Today, neither network can live without the other. And no country’s digitization strategy will work without these networks being integrated and reliable. In the developed world, electricity was a precursor to the internet; in the developing world, both networks are growing together. Many countries that are building both networks simultaneously are layering their digitization strategies on top as well. This combination of networks and strategies will be crucial for all economies to grow and adapt, be they already rich or still emerging. Weekend readingWe misremember the internet’s origins, says Ingrid Burrington. Lower-income children ages 8 to 12 spend almost two hours more time in front of screen media than higher-income children of the same age. There is also a significant homework gap in computer access by income. The Porsche 911 and Nissan GT-R are among the 10 cars with the lowest five-year depreciation. The BMW 5, 6 and 7 Series are among the 10 cars with the highest five-year depreciation. The downturn in U.S. shale drilling has been so steep and brisk that oilfield companies are scrapping pumps, pipes and storage tanks. The secret (and large) supply chain of an AmazonBasics alkaline battery. Nobel laureate M. Stanley Whittingham is working to find the ultimate limit of lithium-ion storage batteries. A profile of Sylvie Bénard of LVMH Moet Hennessy Louis Vuitton SE, the executive in charge of the luxury group’s sustainability efforts. WeWork’s business model was risky, it required an unusual source of investment, “and these days Softbank is the most unusual of all.” Softbank Group Corp.’s Masayoshi Son spoke to an almost empty room at the Future Investment Initiative in Saudi Arabia. The history of U.S. military service dogs. Video series of 16 counterintuitive fundraising lessons from seed and series A venture firm NFX. Alcoa Corp. is selling a 32,000-acre ranch in Rockdale, Texas, that includes 14 lakes, mineral rights and an aluminum smelter it shut down in 2008. Nigeria is reviving a steel plant on hold since the Soviet era. Bumper sticker and parking permit safety risks, according to the National Capital Region Threat Intelligence Consortium. Bloomberg Economics’ New Economy Drivers and Disrupters Report. Get Sparklines delivered to your inbox. Sign up here. And subscribe to Bloomberg All Access and get much, much more. You’ll receive our unmatched global news coverage and two in-depth daily newsletters, the Bloomberg Open and the Bloomberg Close.To contact the author of this story: Nathaniel Bullard at firstname.lastname@example.orgTo contact the editor responsible for this story: Brooke Sample at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nathaniel Bullard is a BloombergNEF energy analyst, covering technology and business model innovation and system-wide resource transitions.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- L Catterton, the $15 billion private equity firm co-founded by luxury-goods maker LVMH Moet Hennessy Louis Vuitton SE, has closed its third Asia fund to back more retail and healthcare companies across the region.L Catterton Asia 3 had a target of $1.25 billion, but remained open after additional investors expressed interest, according to Managing Partner Chinta Bhagat. The fund eventually raised just under $1.45 billion, with less than half deployed.Its establishment comes despite challenges for consumer brands amid trade war concerns and slowing economic growth in China. L Catterton is betting that growing demand for improved medical and retail experiences among Asia’s affluent will help offset these pressures.“I don’t think countries -- I think cities,” Bhagat said in his first interview since joining the firm. “About 50% to 60% of the GDP that matters for a business like ours rests in first tier cities, and they’ve become enormous, with between 10 to 20 million people.”Bhagat joined L Catterton in August from Malaysia’s Khazanah Nasional Bhd., estimated by the Sovereign Wealth Fund Institute to have $37 billion in assets under management. He leads L Catterton’s Asia platform with co-managing partner Ravi Thakran.China, Southeast AsiaL Catterton Asia 3 will run for 10 years and seek deals across China, Japan, India, Southeast Asia, Australia and New Zealand. While the company’s stated average ticket size in Asia is between $50 million to $150 million, Bhagat said the size of the latest fund means it will largely focus on transactions north of $100 million.Examples of investments could be a chain of dental clinics that also offer cosmetic services, he said.But L Catterton will also play to its strengths by helping retail brands grow. Its staff have experience in picking store locations and finding partners -- vital when trying to beat off bigger rivals offering richer valuations, like SoftBank Group Corp.’s Vision Fund.L Catterton’s first Asia fund is on track to deliver a return of around 2 to 2.5 times, Bhagat said.“The simplest way to think of the strategy is anything you can build a consumer brand around,” he said. “If you came to me and said ‘Here’s the Ikea of Asia,’ just as an example, would we look at it? Of course we would because it fits the capability side for our ability to add value and make money.”To contact the reporter on this story: David Ramli in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Katrina Nicholas at email@example.com, David ScheerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- U.S. stocks climbed to a record as rising optimism for a trade deal with China combined with solid earnings and bets the Federal Reserve will cut rates. Treasuries slumped at the start of a a week packed with more results and central bank decisions.The S&P 500 took out its July record after President Donald Trump said the U.S. is ahead of schedule to sign part of the trade deal. Microsoft jumped to an all-time high after winning a Pentagon contract, while AT&T climbed following a board shuffle. Tiffany surged after LVMH said it held discussions with the jeweler. PG&E plunged on liability risk from California wildfires. The Stoxx Europe 600 rose even as banks slipped after HSBC’s disappointing earnings. The 10-year Treasury yield hit a six-week high.The week greeted investors with several doses of positive news, as the signs of progress joined with expectations for further monetary stimulus from the Fed after its Wednesday meeting. Corporate earnings continue to roll in with results topping estimates at a solid clip. Alphabet is set to release results after the close Monday.“Equities are striding to new all-time highs as optimism is hitting investors from all directions,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.In the U.K., the pound steadied versus the euro after the European Union agreed to a Brexit deadline extension, easing the risk of leaving the bloc without a deal on Oct. 31. European bonds edged lower, while gilts were steady. An Asia-Pacific equities benchmark rose for the fifth gain in six sessions. Shares increased in Shanghai, with blockchain-related stocks climbing after Chinese President Xi Jinping hailed the technology.Elsewhere, Argentine bonds fell after opposition candidate Alberto Fernandez secured victory in Sunday’s presidential election, with business-friendly incumbent Mauricio Macri conceding. WTI crude oil slipped after the biggest weekly advance in more than a month. Bitcoin jumped as much as 16% from Friday, before paring its gain by about one-half.Here are some key events coming up this week:Earnings include: Alphabet, Facebook, Pfizer, Airbus, Apple, Exxon Mobil, BP, PetroChina, Credit Suisse, Nomura and Macquarie Group.The Fed is expected to lower the main interest rate when policy makers decide on Wednesday. Futures have priced in about 23 basis points of reduction.U.S. economic growth is forecast to have slowed to 1.6% in the third quarter. GDP data are due Wednesday.The Bank of Japan sets policy on Thursday and Governor Haruhiko Kuroda will hold a news conference.Friday brings the monthly U.S. non-farm payrolls report.These are some of the main moves in markets:StocksThe S&P 500 Index advanced 0.6% as of 4 p.m. New York time.The Nasdaq 100 jumped 1% to a record. The Dow Jones Industrial Average added 0.5%.The Stoxx Europe 600 Index added 0.3%.The MSCI All-Country World Index gained 0.3%.The MSCI Emerging Market Index jumped 0.7%.CurrenciesThe Bloomberg Dollar Spot Index decreased 0.1%.The euro climbed 0.2% to $1.1101.The British pound rose 0.3 % to $1.2864.The Japanese yen slipped 0.3% to 108.98 per dollar.BondsThe yield on 10-year Treasuries advanced five basis points to 1.84%.The yield on two-year Treasuries advanced three basis points to 1.64%.Britain’s 10-year yield climbed four basis points to 0.722%.Japan’s 10-year yield climbed one basis point to -0.122%.CommoditiesWest Texas Intermediate crude fell 1.5% to $55.80 a barrel.Gold futures decreased 0.7% to $1,494.80 an ounce.Palladium rose above $1,800 an ounce for the first time.\--With assistance from Adam Haigh and Robert Brand.To contact the reporter on this story: Claire Ballentine in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Todd WhiteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- LVMH has offered $14.5 billion for jeweler Tiffany & Co. in a bid that could result in Chairman Bernard Arnault’s biggest ever takeover and expand the Louis Vuitton owner’s reach into the U.S.Tiffany said it received an unsolicited $120-a-share proposal from the luxury giant, after the French company confirmed a Bloomberg report that it was considering a bid. Tiffany shares surged 31%, on track for a record one-day gain, to $129 at 2:55 p.m. Monday in New York.The jeweler advised shareholders to take no action, saying its board is reviewing the offer. LVMH made the initial offer on Oct. 15, when it represented about a 33% premium to the previous day’s close, people with knowledge of the matter said.There’s no assurance that preliminary talks will result in an agreement, LVMH said in a statement, while Tiffany said no discussions are under way.A deal for the jeweler would expand the French company’s access to U.S. luxury shoppers, giving it an iconic, 182-year-old brand known for its robin’s egg blue boxes and its role as a favorite haunt of Holly Golightly in Truman Capote’s “Breakfast at Tiffany’s.” Adding the brand to a stable that includes the Bulgari jewel and watch label, Christian Dior fashions, Hublot watches and Dom Perignon Champagne could help LVMH compete against Cartier owner Richemont SA.Jewelry is one of few segments of the luxury sector where LVMH is not the leader, “and we know Mr. Arnault likes to be always No. 1,” RBC analyst Rogerio Fujimori said in a note. “Tiffany would become a better company and stronger competitor under the ownership of LVMH.”Even after Monday’s surge, Tiffany shares are short of their peak of $139.50 in July 2018.‘Stronger Competitor’A fair valuation of the jeweler would be about $160 a share or higher, according to Cowen & Co. analyst Oliver Chen. He wrote in a note Sunday that Tiffany’s “strategic positioning as a gifting authority, brand DNA as a diamond and bridal authority, are leading qualities and deserve an exceptional premium.”LVMH fell 0.5% in Paris trading Monday. It has jumped about 48% this year, giving the company a market capitalization of about $214 billion.The French company has been riding a wave of luxury demand in China but faces risks including that country’s trade war with the U.S. and the months-long anti-Beijing protests in Hong Kong. Earlier this month, it opened a new Louis Vuitton factory in Texas in a ceremony that included President Donald Trump as the French company sharpens its focus on the U.S., its second-largest region by revenue behind Asia.What Bloomberg Intelligence SaysLVMH’s Tiffany bid makes sense, but the $14.5 billion rumored price may be too little, as the 14x Ebitda valuation compares with 20x-plus for LVMH’s Bulgari and Swatch’s Harry Winston deals. Tiffany would boost LVMH to luxury jewelry No. 1 ahead of Richemont and infill its Bulgari, Chaumet and Fred brands.\-- Deborah Aitken, BI luxury retail analystLVMH Confirms Tiffany Interest, Yet Price Tag Looks Light: ReactA takeover of Tiffany would be bigger than the $7 billion LVMH paid for the rest of Christian Dior in 2017. For 70-year-old Arnault, it would be his first major transaction since the purchase of luxury hotel chain Belmond last year, and potentially among the largest deals by a European company in 2019.After a difficult period when it lost track of consumer trends and suffered from a slump in U.S. tourism, Tiffany has been bouncing back under Chief Executive Officer Alessandro Bogliolo, revamping its New York flagship store with major investments targeting younger shoppers.Bogliolo, a former executive of Bulgari and jeans label Diesel who was hired by the U.S. jeweler two years ago after hedge fund Jana Partners pushed for changes, has refreshed Tiffany’s marketing. The CEO said last month that he plans to open more stores in mainland China as a weak yuan deters the country’s consumers from spending overseas.In jewelry, LVMH isn’t as dominant as in fashion. Adding Tiffany would expand the French giant’s potential market with somewhat more accessible products. Unlike Bulgari’s more-rarefied offerings, such as 2 million-euro ($2.2 million) wristwatch, Tiffany is better known for engagement rings that might cost a couple months’ pay.Arnault is already Europe’s richest man, with a fortune of $96.5 billion, according to Bloomberg Billionaires Index. A deal for Tiffany would keep him ahead of Richemont’s Johann Rupert and Gucci owner Kering’s Pinault family in the race to consolidate the luxury industry. With sales of more than $50 billion, LVMH dwarfs Tiffany, which has about $4.4 billion.If an agreement is reached, it would mark the latest push by a French acquirer to tap growth in the U.S. French technology company Dassault Systemes SE agreed in June to buy Medidata Solutions Inc., a software firm that analyzes clinical trials, for $5.7 billion. And last year, Axa SA acquired XL Group Ltd. for $15.3 billion, seeking to capture a bigger slice of the U.S. property and casualty market.(Updates with timing of initial offer in third paragraph.)\--With assistance from Vinicy Chan, Kim Bhasin and Bob Van Voris.To contact the reporters on this story: Ruth David in London at firstname.lastname@example.org;Dinesh Nair in London at email@example.com;Ed Hammond in New York at firstname.lastname@example.org;Robert Williams in Paris at email@example.comTo contact the editors responsible for this story: Aaron Kirchfeld at firstname.lastname@example.org, ;Eric Pfanner at email@example.com, Ben Scent, Jonathan RoederFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The S&P 500 hit a record high on Monday, while the Nasdaq hovered just below its lifetime high touched in late July, as a more conciliatory tone between the United States and China buoyed hopes for a possible trade deal and investors anticipated a rate cut by the Federal Reserve later this week. Microsoft Corp shares climbed 2.54%, making the stock among the biggest boosts to each of three major indexes after the technology giant won the Pentagon's $10 billion cloud computing contract, beating out Amazon.com Inc.