LVMH files countersuit against Tiffany. The conditions to close the acquisition are not met.
29 Settembre 2020 - 08:16AM
LVMH files countersuit against Tiffany. The conditions to close the
acquisition are not met.
September 29th, 2020
LVMH filed yesterday its countersuit against
Tiffany in Delaware Chancery Court. 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. LVMH’s
filing details the Company’s position on these matters and, among
other things, outlines:
- A Material Adverse Effect has occurred. The
notable absence of a pandemic carveout in the definition of a
Material Adverse Effect in the Tiffany Merger Agreement is clear.
It was common before COVID-19 for transactions to contain a
pandemic carveout. In the course of the negotiation, Tiffany sought
and received carveouts for highly specific events, such as
“cyberattacks”, the “Yellow Vest” movement and the “Hong-Kong
Protests”. Yet Tiffany did not obtain a carveout for public health
crises or pandemics. In contrast, hundreds of other merger
agreements executed in the decade preceding the Merger Agreement
contained express pandemic or epidemic carveouts. The pandemic,
whose effects are devastating and lasting on Tiffany, has
irrefutably caused a Material Adverse Effect. This clause alone
would be enough to prevent the closing, but there are other
arguments included below that reinforce LVMH’s position.
- Tiffany breached its covenants to operate in the
Ordinary Course of Business and to preserve its business
organizations substantially intact. Tiffany’s
mismanagement of its business constitutes a blatant breach of its
obligation to operate in the ordinary course. For instance, Tiffany
paid the highest possible dividends while the company was burning
cash and reporting losses. No other luxury company in the world did
so during this crisis. There are many examples of mismanagement
detailed in the filing, including slashing capital and marketing
investments and taking on additional debt.
- A letter LVMH received from the Minister of Europe and
Foreign Affairs in France makes it impossible to close the
transaction with Tiffany before the Outside
Date.
- Finally, LVMH confirms it has fully met its obligations
under the Merger Agreement, including upholding its commitment to
use its reasonable best efforts to obtain all regulatory clearances
as transparently and promptly as practicable. Eight of the
10 requisite antitrust clearances have already been obtained and
LVMH expects to receive approval from the European Commission in
October and Taiwan well before the Outside Date.
LVMH
LVMH Moët Hennessy Louis Vuitton is represented
in Wines and Spirits by a portfolio of brands that includes Moët
& Chandon, Dom Pérignon, Veuve Clicquot Ponsardin, Krug,
Ruinart, Mercier, Château d’Yquem, Domaine du Clos des Lambrays,
Château Cheval Blanc, Colgin Cellars, Hennessy, Glenmorangie,
Ardbeg, Belvedere, Woodinville, Volcán de Mi Tierra, Chandon,
Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle,
Newton, Bodega Numanthia, Ao Yun, Château d'Esclans and Château du
Galoupet. Its Fashion and Leather Goods division includes Louis
Vuitton, Christian Dior Couture, Celine, Loewe, Kenzo, Givenchy,
Pink Shirtmaker, Fendi, Emilio Pucci, Marc Jacobs, Berluti,
Nicholas Kirkwood, Loro Piana, RIMOWA, Patou and Fenty. LVMH is
present in the Perfumes and Cosmetics sector with Parfums Christian
Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe,
Benefit Cosmetics, Make Up For Ever, Acqua di Parma, Fresh, Fenty
Beauty by Rihanna and Maison Francis Kurkdjian. LVMH's Watches and
Jewelry division comprises Bvlgari, TAG Heuer, Chaumet, Dior
Watches, Zenith, Fred and Hublot. LVMH is also active in selective
retailing as well as in other activities through DFS, Sephora, Le
Bon Marché, La Samaritaine, Groupe Les Echos, Cova, Le Jardin
d’Acclimatation, Royal Van Lent, Belmond and Cheval Blanc
hotels.
LVMH CONTACTS
Analysts and investorsChris HollisLVMH+ 33 1 44 13
21 22 |
MediaJean-Charles TréhanLVMH+ 33 1 44 13 26
20 Nik Deogun / Jonathan DoorleyBrunswick Group+1 212 333
3810 Aurélia de LapeyrouseBrunswick Group+33 1 53 96 83
83 Olivier Labesse DGM Conseil+33 1 40 70 11 89 |
- LVMH Countersuit Press Release 29 Sept 2020
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