What happened

It's both official -- and a bit of an anticlimax.

Nearly a month after Tiffany (NYSE:TIF) confirmed that it had received a buyout offer from LVMH (OTC:LVMHF) -- sending Tiffany's stock price soaring 30% in a day -- the company has finally accepted a newer, higher bid from its suitor.

Tiffany stock is up in response -- maybe not 30%, but still up by a respectable 5.9% as of 10 a.m. EST on Monday.


Tiffany stock looks about 6% more sparkling this morning. Image source: Getty Images.

So what

In a press release, LVMH says it will pay $135 cash per outstanding share of Tiffany. That gives the ultra-luxe consumer goods stock an equity value of $16.2 billion. (Including Tiffany's outstanding debt, the value of the deal probably comes in closer to $17.7 billion.)

LVMH said that "the acquisition of Tiffany will strengthen LVMH's position in jewelry and further increase its presence in the United States [and] transform LVMH's Watches & Jewelry division."

Now what

Both companies' boards have approved the acquisition. Assuming regulators likewise approve, and absent any competing offers for Tiffany (and none seems to be anticipated -- Tiffany's share price is actually a bit below LVMH's offer price right now), this deal should close sometime in the middle of 2020.

Holding on to your Tiffany shares to collect the $2.10 or so difference between their current price and LVMH's offer price will probably only result in another 1.5% gain (3% annualized, assuming the deal closes within six months). So I'd say there's no real downside to selling your Tiffany stock now -- unless you want to postpone any tax bite into next year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.