• LVMH countersued Tiffany on Monday, and said it remains confident that it can walk away from its $16 billion takeover of the US jeweler. 
  • Tiffany breached the agreement by paying out the highest possible dividends during the pandemic, French luxury goods conglomerate LVMH claimed in the countersuit.
  • A letter to LVMH from the French government also made it “impossible” to close the deal before the deadline, it added.
  • But Tiffany called the counterclaims “baseless and misleading,” and claims that LVMH breached the merger agreement.
  • Visit Business Insider’s homepage for more stories.

French luxury goods giant LVMH countersued Tiffany & Co on Monday, and still has “full confidence” it can walk away from a proposed $16 billion merger because of the US jeweler’s financial mismanagement during the pandemic, it said in a statement on Tuesday.

LVMH said that Tiffany didn’t consider the risk of a viral outbreak when it made the deal, and paid out the highest possible dividends while it was making losses during the pandemic — something “no other luxury company in the world did,” it claimed.

Tiffany called LVMH’s counterclaims “baseless and misleading,” and said LVMH simply wanted to avoid paying the agreed $16 billion price for Tiffany. It said it was within its rights to make the dividend payments, and said LVMH had violated the merger agreement by contacting the French government.

The countersuit comes after Tiffany sued LVMH on September 9, arguing that the French conglomerate deliberately delayed antitrust proceedings so it wouldn’t have to go through with the deal it signed in November 2019. LVMH had said it couldn’t close the deal with Tiffany because it received a letter from the French government asking it to delay the transaction until January 2021, which was beyond the acquisition’s November 24 contractual deadline.

LVMH: “Impossible” to close

LVMH walked away from its $16.2 billion offer to buy Tiffany this month after claiming a series of poor decisions by Tiffany’s board since the deal was unveiled late last year


Johannes EISELE

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French behemoth LVMH said Tuesday that it had filed a countersuit against the American jewellery brand Tiffany, setting up an unusual legal fight after the collapse of one of the biggest luxury takeover bids in decades.

LVMH walked away from its $16.2 billion offer this month after claiming a series of poor decisions by Tiffany’s board since the deal was unveiled late last year.

It also cited a letter from the French foreign ministry that purportedly asked for a delay to the tie-up because of political uncertainties caused by the long-running trade war between the EU and Washington.

Tiffany rubbished the claims and sued to force LVMH to go through with its bid, and a US court in Delaware, where many US firms are incorporated, approved a fast-track trial set to begin in January.

The court also urged the two sides to try to work out a settlement, but an escalating war of words makes that prospect unlikely.

“LVMH continues to have full confidence in its position that the conditions necessary to close the acquisition of Tiffany have not been met and that the spurious arguments put forward by Tiffany are completely unfounded,” the French firm, by far the world’s largest luxury conglomerate, said Tuesday.

It again accused Tiffany of “mismanagement” by paying high dividends, investing when it should have been conserving cash because of the Covid-19 pandemic, and taking on too much debt.

Tiffany refused to comment when contacted by AFP in New York on Monday, after a report of LVMH’s countersuit was published by Bloomberg News.

Source Article

(Bloomberg) — LVMH countersued Tiffany & Co. weeks after pulling out of its $16 billion purchase of the iconic New York-based jeweler, saying the decision was driven by the French government’s request to delay the deal’s closing and Tiffany’s mismanagement during the pandemic.



a sign above a store window: Tiffany & Co. Luxury Jewellery Stores As LVMH Abandons $16 Billion Deal Over U.S. Tarrifs


© Bloomberg
Tiffany & Co. Luxury Jewellery Stores As LVMH Abandons $16 Billion Deal Over U.S. Tarrifs

The maker of Louis Vuitton bags and Moet & Chandon Champagne contends Tiffany’s business was devastated by the coronavirus outbreak and that provides proper grounds to nix the buyout, according to a filing Monday in Delaware Chancery Court.

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Tiffany sued LVMH earlier this month to force it to go forward with the deal, saying in a court filing that LVMH is trying to use the pandemic-induced downturn in the luxury sector to negotiate a lower acquisition price.

In its counterclaims, LVMH also cited a letter from French Foreign Minister Jean-Yves Le Drian seeking a delay in closing the transaction as part of a trade war with the U.S. The letter amounts to a “legal restraint” under the terms of the buyout that prohibits the deal from closing by a Nov. 24 deadline, LVMH’s lawyers noted in the 96-page filing.

Tiffany executives said they couldn’t immediately comment Monday on LVMH’s countersuit. They have said in earlier filings that LVMH deployed the minister’s letter as a pretext to wrongfully pull out of the purchase.

Judge Joseph Slights III has set a Jan. 5 non-jury trial to decide whether LVMH must consummate the sale.

‘Excessive’ Controversy

Le Drian on Sunday called “excessive” the controversy surrounding his missive. “It’s my duty to protect French interests,” he told Le Parisien newspaper in an interview. “Regarding the trans-Atlantic situation, the trade disagreements we have are known. It was therefore my role to inform LVMH