What happened

Tiffany (NYSE:TIF) shareholders had a sparkling October, as the stock rose 34% compared to a 2% increase in the S&P 500, according to S&P Global Market Intelligence. The rally pushed shares back ahead of the market and the luxury jeweler now sits higher by over 50% so far in 2019.

So what

Shares popped after investors learned that Tiffany is being pursued as an acquisition target by French luxury brand manager LVMH (OTC:LVMUY). The company confirmed an unsolicited bid to purchase Tiffany at a price of $120 per share, or about 22% above the stock's closing price before news broke about the offer.

A woman wearing diamond necklace, bracelet, and earrings

Image source: Getty Images.

Now what

As of early November, Tiffany hasn't announced whether it thinks the buyout offer is in shareholders' best interests. The management team might accept the deal with a few tweaks, hold out for a higher price, or reject the proposal after consulting with its financial and legal advisors.

With the consumer discretionary stock's price sitting above $120, investors are apparently banking on a higher bid coming from LVMH or perhaps another company. However, it's also possible that Tiffany will choose in the coming weeks to continue operating as a stand-alone business, and that news would likely erase much of the recent share-price gains.