There’s a reason Bernard Arnault is the richest person in the world. Chairman, CEO and major shareholder of LVMH Moët Hennessy Louis Vuitton LVMUY + 1.26%, the world’s largest luxury goods retailer, he knows how to buy and integrate companies. He is also a smart negotiator.
On LVMH’s recent conference call, Arnault said he was enthusiastic about his company’s acquisition of Tiffany in 2021, saying that Tiffany’s revenue has doubled since the transaction.
Tiffany will earn over €1 billion [$1.08 billion] for the first time, he said, adding.
“We were only a way there when we took over the business. Mo said to me, “Why are you buying this business at this price?” But maybe it wasn’t handled in the most dynamic way. I won’t go into it…
The deal was controversial. LVMH agreed to pay more than $16 billion to U.S. jewelry retailers in late 2019 and attempted to exit in September 2020 after the pandemic hit Tiffany’s sales and earnings.
The company then redacts the deal. LVMH ended up paying Tiffany $131.50 per share for him, less than the original $135 and nearly 30 times Tiffany’s 2019 net income of $550 million.
Equivalent. Based on his Arnault statement that his earnings doubled, the current multiplier is about 15x.
LVMH has made some impressive acquisitions, including cosmetics retailer Sephora in 1997 for his $200 million plus, and luxury jeweler Bulgari in 2011 for his $5 billion. rice field.
The 73-year-old Arnaud is now worth $190 billion, according to Bloomberg’s balance sheet, beating second-place Elon Musk at $170 billion. Stocks surged on Tuesday, ending a strong January. The IMF has raised its global growth forecast for the UK alone.
Shrinking among major economies. Massive strikes by British government officials will not help. The Federal Reserve raised interest rates by a quarter of a percentage point, blew the door open with job creation, up to 517,000, and the unemployment rate dropped to his three.
Four%. The Dow Jones Industrial Average DJIA -0.38% for the week fell 1.5% to 33,926.01. S&P 500SPX -1.04% 1.6% increase to 4136.48. Nasdaq Composite rose 3.3% to 12,006.95.
Fed Hike:
As expected, the Fed hiked interest rates from 0.25% to 4.5% to 4.75%. Fed Chairman Jerome Powell said while inflation eased and a “disinflationary process” began, rate hikes were still underway.
The Bank of England and the European Central Bank followed suit, raising interest rates to 4% and 2.5% respectively. This was the BOE’s 10th consecutive rate hike.
Earnings Beat:
Earnings Seasons have accelerated. Caterpillar missed for the first time since 2020.
Both Exxon-Mobil and General Motors have won, and surprisingly, General Motors won. Since then, many technologies have emerged.
Beating out Spotify, Advanced Micro Devices’ revenue is down 98% for him, but it’s still winning. Snap failed, but the meta platform beat sales forecasts and buybacks, sending the stock soaring. Apple and Alphabet missed out and Amazon.com outperformed but provided weak guidance.
Default Dance:
House Speaker Kevin McCarthy met with President Joe Biden as the default dance began. Biden has said he would negotiate the budget but not the debt ceiling. Mr. McCarthy said he was optimistic that talks to cut the deficit would continue, but offered few details on what that might mean.
New offensive?
Ukraine warned of Russian offensive in Donbass as Russian forces massed on the front lines.
The European Union and the G7 have agreed to limit Russian luxury petroleum products, such as diesel, to $100 a barrel.
Adani Meltdown:
Stocks in companies affiliated with Indian conglomerate Adani Group have lost more than $120 billion and are rising. Adani issued a counter-argument last Sunday, but couldn’t stop denying it.The Hindenburg report came ahead of Adani’s $2.5 billion public offering, although it was fully tendered. , had to be canceled as the meltdown continued, causing Adani’s bonds to fall and fears of contagion to rise.
Transaction Record:
Elon Musk appears to have paid the first interest on a $12.5 billion debt to buy Twitter. Separately, Mr. Musk was ruled not responsible for investors’ losses in connection with his “funds secured” tweet.
Originally published at https://businessdor.com on February 6, 2023.
No comments:
Post a Comment