LVMH Countersues Tiffany Over Merger--Update
29 Settembre 2020 - 1:06PM
Dow Jones News
By Matthew Dalton
LVMH Moët Hennessy Louis Vuitton SE sued Tiffany & Co over
their soured merger deal, saying the U.S. jeweler's business has
been so deeply damaged during the pandemic that their takeover
agreement is invalidated.
The lawsuit, filed Monday in Delaware Chancery Court, counters a
lawsuit that Tiffany filed this month against LVMH after the French
conglomerate -- owner of Louis Vuitton, Dior and dozens of other
luxury brands -- said it was backing out of its $16 billion
acquisition of the jeweler.
LVMH's lawsuit says Tiffany has suffered a material adverse
change to its business, triggering a standard provision in merger
agreements that allows the buyer to walk away. Tiffany has been
mismanaged during the pandemic and is particularly vulnerable to
the disruption the industry is likely to suffer in the years to
come, LVMH says.
The complaint says Tiffany's dependence on the U.S. market and
foot traffic in malls means the jeweler's prospects are
particularly grim compared with the broader luxury industry, which
has been thrown into turmoil by the pandemic.
To escape from a merger contract, acquiring companies face the
burden of showing that a target company's performance has been
unusually bad relative to others in its industry, legal experts
say.
"The pandemic's disruption to the luxury industry and to Tiffany
in particular will persist well into 2021 at a bare minimum,"
LVMH's complaint says. "Tiffany is particularly ill-suited for the
challenges ahead."
Tiffany "is a mismanaged business that over the first half of
2020 hemorrhaged cash for the first time in a quarter century, with
no end to its problems in sight," according to the complaint.
Tiffany Chairman Roger Farah said "LVMH's specious arguments are
yet another blatant attempt to evade its contractual obligation to
pay the agreed-upon price for Tiffany."
The complaint repeats the claim that LVMH is legally barred from
completing the deal because of a letter sent by the French foreign
minister, Jean-Yves Le Drian, that said LVMH "should" delay the
acquisition of Tiffany to early January, more than a month after
the deadline for closing the deal.
"'Should' is a translation of 'il conviendrait,' used in the
original letter in French, which is understood to have a (polite)
mandatory meaning under French law," LVMH said.
Before Mr. Le Drian sent his letter, LVMH representatives asked
the French finance minister for help in backing out of its
agreement to take over Tiffany, and was turned down, according to
senior French officials.
Mr. Le Drian last week said he was responding to a request from
LVMH for political advice when he wrote the letter to the luxury
conglomerate.
Write to Matthew Dalton at Matthew.Dalton@wsj.com
(END) Dow Jones Newswires
September 29, 2020 06:51 ET (10:51 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Grafico Azioni Lvmh Moet Hennessy Louis... (EU:MC)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Lvmh Moet Hennessy Louis... (EU:MC)
Storico
Da Apr 2023 a Apr 2024