LVMH, the world’s top luxury retailer, said Monday it will take control of Bulgari for 4.3 billion euros in a deal to challenge Cartier and Tiffany in the jewellery business.
Bulgari, whose jewels are worn by the likes of Sofia Loren, Tina Turner and Keira Knightley, will receive 16.5 million shares from LVMH worth 1.9 billion euros for the family’s 51% holding.
The deal initially failed to impress investors, with the French company’s shares sliding 0.26% on the announcement, but they ended the day up 1.26% to 112.95 euros on a market down 0.74%.
Bulgari’s shares shot up nearly 60% in Milan, as under the terms of the agreement LVMH will also offer other Bulgari shareholders 12.25 euros a share, a 63% premium from Friday’s closing price.
LVMH said it would finance the remaining 2.4 billion euros of the operation from its resources and through bond issues. Bulgari will become the second largest family shareholder in the LVMH group, taking two seats on the board.
Founded in 1884 by Greek immigrant Sotirios Bulgari, the small jewellers in Rome’s historic centre shot to fame when actress Liz Taylor wore one of its diamond and emerald broaches at her 1964 wedding to Richard Burton.
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