LVMH and Tiffany Are Talking Merger After Louis Vuitton Made Its Offer $1.2 Billion More Luxurious

LVMH and Tiffany & Co. entered talks after the French owner of Louis Vuitton boosted its offer for the U.S. jeweler in an effort to clinch the biggest acquisition ever in the luxury-goods industry, according to people familiar with the matter.

The revised proposal is about $130 per share, said the people, who asked to not be identified because the matter isn’t public. No final decision has been made and the talks could fall through.

LVMH is trying to bring Tiffany on board with an offer worth about $15.7 billion, up from the $120 a share, or about $14.5 billion, that it offered last month. The shares have traded above the original bid for more than three weeks as investors consider it undervalues Tiffany. Some analysts see even further potential, with price targets of $140 at Credit Suisse and even $160 at Cowen.

Tiffany’s shares rose 3.6% to $127.76 in premarket trading in New York on Thursday. LVMH fell as much as 1.4% in Paris.

A representative for LVMH declined to comment. A representative for Tiffany couldn’t immediately be reached.

Tiffany was expected to reject the original offer as too low. Executives believe the company should command a similar earnings multiple to other luxury takeovers such as Bulgari, people close to the situation have said.

With no rival bidders emerging, LVMH Chairman Bernard Arnault has been biding his time since Bloomberg reported on his $120-a-share offer. Europe’s richest man has built LVMH through a series of acquisitions. After creating the world’s biggest luxury company, he’s branched out in new directions, including Rimowa suitcases and Belmond hotels.

While LVMH has been riding a wave of luxury demand in China, buying Tiffany would increase its exposure to the U.S., where it recently opened a new Louis Vuitton factory in Texas in a ceremony that included President Donald Trump and his daughter Ivanka.

By gaining the 182-year-old brand known for its robin’s egg blue boxes, LVMH would challenge Cartier owner Richemont for dominance in the global jewelry business.

Tiffany has been working to bounce back under Chief Executive Officer Alessandro Bogliolo, who decided to cut back on entry-priced gifting options and revamp marketing to target younger shoppers. At LVMH, the brand would join a stable that already includes Christian Dior fashion, Bulgari jewelry and Dom Perignon Champagne.

More must-read stories from Fortune:

Malls of tomorrow will be less big box, more lifestyle, and play well with e-commerce too
—How the president of Nike Direct plans to boost tech to grow sales at flagship stores—Oprah’s favorite high-tech things for 2019
Walmart Black Friday ad: 8 deals you shouldn’t ignore
—Gift guide: Must-have luxury items for everyone in your life
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.