LVMH to sue Tiffany, challenge its handling of Covid-19 crisis

Louis Vuitton owner LVMH suspends $14.5 billion Tiffany buyout

It also charged that Tiffany's lawsuit in the Court of Chancery of the State of DE was "communicated in a misleading way to shareholders and is defamatory". Over the narratives of such chaotic outlook in transatlantic trade relationship, the Louis Vuitton owner LVMH had confirmed earlier on the day it would no longer pursue a $14.5 billion takeover deal for the American luxury jeweller Tiffany & Co.

Tiffany & Co has received regulatory approvals from the Japan Fair Trade Commission and the Mexican competition authority for its contentious $16 billion acquisition by luxury goods group LVMH, the USA jeweller said.

LVMH said the lawsuit was "totally unfounded" and "defamatory", promising to "defend itself vigorously".

LVMH has actually argued it can't complete its acquisition of Tiffany after the French federal government asked for a delay on sealing the deal.

LVMH claims the diamond retailer botched its handling of the coronavirus accusation meant to bolster its argument for scrapping the $16 billion deal.

"The first-half results and its perspectives for 2020 are very disappointing, and significantly inferior to those of comparable brands of the LVMH Group during this period", it said.

Therefore, it said "the necessary conditions for the conclusion of the acquisition of Tiffany are not fulfilled".

LVMH also said it had had the opportunity to examine Tiffany's current economic situation and its management of the crisis. LVMH agreed to pay $135 a share in the deal, but Tiffany shares were trading at $113.78 as of 10:02 a.m. Thursday. Since the deal was announced a year ago, the COVID-19 crisis has hit the global luxury market and trade tensions have flared between the USA and France.

Tiffany filed suit against LVMH in DE, the state where the group is registered, to force it to complete the deal outlined in 2019.

LVMH also maintains that "Tiffany did not follow an ordinary course of business, notably in distributing substantial dividends when the company was loss making and that the operation and organisation of this company are not substantially intact".



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