The legal dispute between LVMH and Tiffany is about to get into the thick of things. At this point, we know the point of contention. Last week the French group withdrew from a 16.2-billion-dollar deal, quoting a letter of the French government, whose aim was the acquisition of the jewellery brand. There is a new date to be saved on the agenda now: September 21st. On that day, the Court of Delaware, with which Tiffany filed all documents to summon LVMH, is due to announce its first verdict.
Between LVMH and Tiffany
Tiffany claim that the deal with LVMH must be closed, on financial terms previously agreed, within November 24th, which is the deadline formerly scheduled. That is why the brand asked the American court to rule in a timely manner, in order to be compliant with due dates. Yet, on the other hand, if the Court of Delaware overrules accusations, it will be extremely difficult to reach a clean verdict in just two months.
Tiffany criticised the French luxury giant for the “cheeky efforts” they have made to avoid paying the sum of money previously agreed. At the same time, they have firmly rejected bad practice allegations, which refer to the pandemic period. Most of all, LVMH have accused Tiffany of giving out large dividends while going through such crisis times, that is, when sales were decreasing.
“Changeable explanations provided by LVMH evidence their dishonesty while dealing with our company – pointed out Roger Farah, president of Tiffany board of directors, during an interview granted to Business of Fashion –: nothing more than a diversion, actually, aiming to disguise their real attempts to run out of time and therefore avoid fulfilling their obligations”.
The French reply
LVMH have responded by saying there is no reason why the US Court of Justice should act faster in such a complicated case. According to their statement, if the deadline had been postponed by six to seven months, both parties could have been suitably prepared. “Tiffany are just trying to make a diversion”, remarked LVMH in the documents they filed with the courts.
In the same documents the French group emphasized that the US brand might well achieve more rewarding results in the fourth quarter of the current year, compared to 2019, as they claim, only if they cut investments.
LVMH have also made clear they no longer consider 135 dollars per share, mutually agreed prior to the pandemic outbreak, a fair price for Tiffany, for the time being. As reported by Business of Fashion, the French company intentionally delayed submission of documents to be given the green light by the Antitrust European Commission for a few specific reasons. Events occurred from the deal drafting till its dissolution, that is, social and economic turmoil alongside trade tensions between the United States and France, are a good reason to renegotiate the agreement or entirely cancel the buyout deal.
Read also:
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- LVMH disagrees: Tiffany’s acquisition may be cancelled
