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TAG accepts LVMH bid
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September 13, 1999: 10:38 a.m. ET
Swiss watchmaker will recommend $740M conditional cash offer
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LONDON (CNNfn) - Swiss watchmaker TAG Heuer stock soared nearly 8 percent Monday after the company said it would recommend a $740 million cash offer for all its shares by the French luxury goods company LVMH Moet Hennessy.
TAG Heuer -- whose predecessor, Heuer, began keeping official time at the Olympics in 1924 -- said its board accepted a conditional offer from LVMH valuing each of its shares at 215 Swiss francs for a total of around 1.15 billion francs ($739 million).
The bid is contingent on 50.1 percent of TAG's shares being tendered.
TAG shares were up 15.50 Swiss francs, or 7.8 percent, at 213.50 in Zurich, while LVMH (PMC) stock eased 1.4 percent to 283.6 euros in Paris.
The announcement capped a strategic review underway at TAG Heuer since June. During that time, TAG said it held discussions with LVMH and other prospective partners on strategic alliances.
TAG said Monday that shareholders representing 38.8 percent of the company's share capital had accepted the LVMH bid, paving the way for recommendation to other shareholders.
TAG chief executive Christian Viros told reporters last month his company was "actively looking for companies that could be acquired." Rival Swiss watchmaker Swatch had been touted as a prospective bidder, though Swatch officials denied they were aware of any talks between the companies.
TAG Heuer's largest single shareholder, the TAG Gruppe, holds a 28.5 percent stake, owned in turn by a Geneva-based investor, Mansour Ojjeh.
LVMH, the Paris-based maker of such brands as Moet & Chandon champagne, Givenchy perfume and Louis Vuitton handbags, was recently rebuffed in a nasty takeover battle for Italian fashion house Gucci.
LVMH chairman and chief executive Bernard Arnault, who along with his family owns 47 percent of the company, said Monday the deal with TAG "will result in the creation of a powerful base for further development in the sector."
--from staff and wire reports
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