LVMH, the world’s biggest luxury group, said on Monday it had approached Tiffany & Co about a possible takeover of the U.S. jeweller.

“In light of recent market rumours, LVMH Group confirms it has held preliminary discussions regarding a possible transaction with Tiffany,” the company said in a statement. “There can be no assurance that these discussions will result in any agreement.”

One source familiar with the matter said LVMH, which owns the Louis Vuitton and Bulgari brands among others, had proposed a bid valuing Tiffany at about $120 per share. That would be equivalent to a $14.5 billion acquisition offer - which would make it the acquisitive French group’s biggest purchase to date.

That would be a sharp premium to Tiffany’s current share price, which closed at $98.55 on Friday.

Cash-rich LVMH did not give any financial details.

Another source familiar with the situation, said the French group had submitted a preliminary, non-binding offer to Tiffany earlier this month.

LVMH shares were up 1% in early trading, touching highs last seen in July.

“LVMH has ample financial capacity for a deal and we also expect many strategic and financial synergies,” analysts at Cowen said in a note.

Tiffany - which according to the sources has hired advisers to review LVMH’s offer but has yet to respond, and may not negotiate a deal - has been caught out by the U.S.-China trade war as Chinese tourists spend less in U.S. shopping hubs.

That has pressured its sales in recent quarters, as it tries like its rivals to push further into mainland China to capture the shift in spending patterns as Chinese clients splurge more at home.

Still, jewellery is more broadly emerging as one of the brightest and fastest-growing spots in the luxury goods sector.

Shares in European watch and jewellery companies were among the top gainers in Europe in early deals after news of LVMH’s interest in Tiffany. Pandora was up 2.8%, while Salvatore Ferragamo was the biggest gainer on the Italian bourse, up 3.7%, and Swatch and Richemont topped the Swiss market, up 1.6 and 1.9% respectively at 0841 GMT.

LVMH rival Kering has been looking to expand in this area too, including by launching high-end jewellery lines for its fashion brand Gucci.

Switzerland’s Richemont, meanwhile, a sector leader with labels like Cartier, has also been adding to its portfolio, and recently acquired Italy’s Buccellati.

Tiffany, founded in 1837 and a storied name in jewellery, is one of the sector’s top prizes.

“Tiffany is potentially the biggest prey and the only U.S. global luxury brand,” analysts at Jefferies said.

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