LVMH has offered $14.5bn (€13bn) for jeweller Tiffany & Co, in a bid that could result in chairman Bernard Arnault's biggest-ever takeover and expand the Louis Vuitton owner's reach into the US.
Tiffany said it had received an unsolicited $120-a-share proposal from the luxury giant, after the French company confirmed a Bloomberg report that it was considering a bid.
The jeweller advised shareholders to take no action, saying its board was reviewing the offer.
The price would be 22pc more than the October 25 close. Tiffany shares surged to $128.30 early yesterday.
There is no assurance that preliminary talks will result in an agreement, LVMH said in a statement, while Tiffany said no discussions were under way.
A deal for the jeweller would expand the French company's access to US luxury shoppers, giving it an iconic, 182-year-old brand known for its robin's egg blue boxes and its role as a favourite haunt of Holly Golightly in Truman Capote's 'Breakfast at Tiffany's'.
Adding the brand to a stable that includes the Bulgari jewel and watch label, Christian Dior fashions, Hublot watches and Dom Perignon champagne could help LVMH compete against Cartier owner Richemont.
Jewellery is one of few segments of the luxury sector where LVMH is not the leader "and we know Mr Arnault likes to be always number one", RBC analyst Rogerio Fujimori said in a note.
"Tiffany would become a better company and stronger competitor under the ownership of LVMH."
Even after yesterday's 30pc surge, Tiffany shares are well short of their peak of $139.50 in July 2018.