Most of us would probably swallow nervously at the thought of splashing several thousand dollars on a diamond ring in the current environment. It looks particularly extreme, though, to see Bernard Arnault — the fifth-richest person in the world — go to such extraordinary lengths to renegotiate his $16 billion acquisition of Tiffany & Co. for what may well end up being a 2.6% price cut. But hey, maybe that’s why he’s a billionaire.

After months of legal wrangling over Arnault’s attempts to back out of the deal, which was struck in happier pre-pandemic times, the billionaire’s conglomerate LVMH Moet Hennessy Louis Vuitton SE is said to be approaching a settlement with Tiffany. According to Bloomberg News, Tiffany’s board is said to have approved a price of $131.50 per share, a smidge lower than the initial price of $135, or a saving of about $425 million in total. 

This looks like a rounding error next to Arnault’s $90.4 billion fortune and LVMH’s $240 billion market cap. One might legitimately ask if this mooted price cut, if approved, was worth the bother. Arnault’s campaign against Tiffany included dragging President Emmanuel Macron into the fight and claiming that his government asked the transaction be delayed. The supporting letter failed to convince, as did the idea that Tiffany was performing badly enough to justify “buyer’s remorse,” even if the pandemic-induced recession is expected to hit luxury-industry revenues to the tune of 35% this year.

Yet it’s likely that if a deal is struck in this meager range, Arnault will be congratulating himself at having acquired a trophy asset at a reduced price. As paradoxical as it may seem for someone with more than nine zeroes to his name, if there’s one thing a billionaire hates, it’s overpaying. 

The business logic of LVMH buying Tiffany is obvious: The two firms’ combined market share in luxury jewelry would be above 17%, there would be little overlap with LVMH’s Bulgari brand, and Tiffany’s large, well-located stores in Asia look suited to a post-pandemic world, according to Bloomberg Intelligence. Alternative targets like Cie Financiere Richemont SA looked trickier on the antitrust front, according to Jefferies, and letting Tiffany go to another buyer would be a missed opportunity.

But this also goes beyond business. Owning this iconic jeweler would put Arnault in a different league of luxury billionaire. Tiffany is a one-of-a-kind brand, where the packaging of the “1837 Blue” box almost matters more than what’s inside. It bestows star status on its owner: Google searches in the U.S. for “Bernard Arnault” hit an all-time high last year. The takeover even helped Arnault strike an unusual bromance with Donald Trump, part of a charm offensive that saw his company shift more production Stateside.

One could of course argue that even $131.50 per share is still too high for Tiffany. My Bloomberg Opinion colleague Andrea Felsted recently suggested a revised price of $105 to $120 per share might be more reasonable.

But getting there would have generated more bad blood. The odds of winning a legal battle in Delaware, where Tiffany filed its claim against LVMH, always looked tilted toward the U.S. firm. And the longer a courtroom battle drags out, the more costly the fees for all.

These are cut-throat times for billionaires like Arnault, for whom a pandemic is both a potential hit to the bottom line, yet also a macabre opportunity to buy assets on the cheap. Paying $15.5 billion rather than $16 billion for Tiffany isn’t exactly a massive bargain, but in the tiny world of the uber-rich, it is an excuse to feel even better about one’s latest trophy. For the rest of us, it’s probably not a negotiating style we could afford to emulate.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering the European Union and France. He worked previously at Reuters and Forbes.

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