LVMH handbags Tiffany as disputed £12.6bn takeover heads for the courts
Written by Rother Radio News on 29/09/2020
The disputed $14.5bn (£12.6bn) takeover of jeweller Tiffany & Co by LVMH is heading for a bloody court battle in the US.
The French luxury goods firm announced earlier this month that it was abandoning the deal agreed in November last year.
It cited the COVID-19 crisis and a French government request to delay the purchase until 2021 on the grounds it could result in additional US tariffs on French products in a trade dispute with President Donald Trump.
The decision to pull out prompted Tiffany to launch a lawsuit against the company in Delaware.
On Tuesday, LVMH confirmed it had counter-sued Tiffany, claiming financial mismanagement during the pandemic.
The jewellery firm argues LVMH – run by French billionaire and Europe’s richest man Bernard Arnault – should be forced to complete the deal on the terms agreed.
A four-day hearing has been set for January, but the judge in the case has urged both sides to settle before an expensive court battle begins.
The deal had been expected to complete before summer this year, but the timetable was pushed back by the coronavirus crisis.
LVMH, which includes the Louis Vuitton, Christian Dior, Givenchy and Moet & Chandon brands, had said at the time of the agreement that the addition of Tiffany would boost its presence in the US market.
The company’s complaints against Tiffany include its decision to maintain dividend levels at a time when it was “burning cash and reporting losses” during the lockdown.
“No other luxury company in the world did so during this crisis,” LVMH said.
Tiffany described the claims as “baseless and misleading”.
“Tiffany has acted in full compliance with the merger agreement, and we are confident the court will agree at trial and require specific performance by LVMH,” its chairman Roger Farah said in a statement.
© Sky News 2020