Item 8.01. |
Other Events. | This Current Report on Form 8-K discloses certain additional information relating to the previously announced Agreement and Plan of Merger, dated November 24, 2019 (as it may be amended from time to time, the “Merger Agreement”), by and among Registrant, LVMH Moët Hennessy – Louis Vuitton SE, a societas Europaea (European company) organized under the laws of France (“Parent”), Breakfast Holdings Acquisition Corp., a Delaware corporation and a wholly owned indirect subsidiary of Parent (“Holding”), and Breakfast Acquisition Corp., a Delaware corporation and a wholly owned direct subsidiary of Holding (“Merger Sub”), providing for the merger of Merger Sub with and into Registrant (the “Merger”), with Registrant continuing as the surviving company in the Merger and an indirect wholly owned subsidiary of Parent.
In connection with the Merger Agreement and the transactions contemplated thereby, on January 6, 2020, Registrant filed with the U.S. Securities and Exchange Commission (the “SEC”) a definitive proxy statement on Schedule 14A (the “Definitive Proxy Statement”) with respect to the special meeting of Registrant’s stockholders scheduled to be held on February 4, 2020 in connection with the Merger (the “Special Meeting”). As previously disclosed in the Definitive Proxy Statement, at that time, two purported stockholder complaints had been filed against Registrant and the members of the board of directors of Registrant in the United States District Court for the Southern District of New York and in the United States District Court for the District of Delaware, captioned Stein v. Tiffany & Co., et al., Case No. 1:19-cv-11926 (S.D.N.Y.), and Thompson v. Tiffany & Co., et al., Case No. 1:20-cv-00009 (D. Del.), and filed on December 30, 2019 and January 3, 2020, respectively. The plaintiff in the Thompson action purports to sue on behalf of a putative class of Registrant’s stockholders.
Following the filing of the Definitive Proxy Statement with the SEC, on January 8, 2020, two additional complaints were filed against Registrant and the members of the board of directors of Registrant in the United States District Court for the Southern District of New York by purported stockholders of Registrant, captioned Federman v. Tiffany & Co., et al., Case No. 1:20-cv-00159 (S.D.N.Y.), and Daka v. Tiffany & Co., et al., Case No. 1:20-cv-00170 (S.D.N.Y.), respectively. The complaints allege that the Definitive Proxy Statement filed with the SEC on January 6, 2020 was materially incomplete, false or misleading in certain respects, thereby allegedly violating Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78n(a), 78t(a)) and SEC Rule 14a-9 (17 C.F.R. § 240.14a-9) promulgated thereunder. The complaints purport to seek injunctive relief and money damages. Registrant believes the allegations in these actions are without merit.
While Registrant believes that no additional disclosure is required to supplement the Definitive Proxy Statement under applicable laws, to minimize the costs, risks and uncertainties inherent in litigation, to avoid any potential delay of the consummation of the Merger and to provide additional information to Registrant’s stockholders, and without admitting any liability or wrongdoing, Registrant has elected to moot the disclosure claims with certain supplemental disclosures to the Definitive Proxy Statement as set forth below. Nothing herein shall be deemed an admission of the legal necessity or materiality of any of the disclosures set forth herein. To the contrary, Registrant denies all allegations in the lawsuits that any additional disclosure was or is required and denies that it has committed any violation of law.
Supplemental Disclosures to Definitive Proxy Statement
This supplemental information to the Definitive Proxy Statement should be read in conjunction with the Definitive Proxy Statement, which should be read in its entirety, including the annexes thereto. All page references in the information below are to pages in the Definitive Proxy Statement, and all terms used but not defined below shall have the meanings set forth in the Definitive Proxy Statement.
The following underlined language is added to, and the stricken language removed from, the second paragraph on page 55 of the Definitive Proxy Statement in the section entitled “The Merger—Opinions of the Company’s Financial Advisors—Opinion of Centerview Partners—Discounted Cash Flow Analysis.”
In performing this analysis, Centerview calculated a range of equity values for the Company by (a) discounting to present value as of October 31, 2019 using discount rates ranging from 7.5% to 8.5% (reflecting Centerview’s analysis of the Company’s weighted average cost of capital) and the mid-year convention: (i) the forecasted fully taxed unlevered free cash flows of the Company over the period beginning October 31, 2019 and ending on January 31, 2025 as calculated by Centerview as set forth in the section entitled “The Merger—Certain Company Forecasts” beginning on page 65, and (ii) a range of implied terminal values of the Company at the end of the Forecast period, calculated by Centerview applying an illustrative range of enterprise value to EBITDA multiples of 13.0x to 18.0x, which Centerview selected utilizing its professional judgment and expertise, to the Company’s EBITDA for the terminal year (approximately $1.5 billion), as set forth in the section entitled “The Merger—Certain Company Forecasts” beginning on page 65 and (b) subtracting from the foregoing results the Company’s net debt as of October 31, 2019 (approximately $465 million), calculated based on as set