UK markets close in 13 minutes
  • FTSE 100

    +20.62 (+0.27%)
  • FTSE 250

    +35.26 (+0.19%)
  • AIM

    +1.55 (+0.19%)

    +0.0027 (+0.24%)

    -0.0022 (-0.18%)
  • Bitcoin GBP

    +32.04 (+0.14%)
  • CMC Crypto 200

    +9.38 (+1.53%)
  • S&P 500

    +27.75 (+0.69%)
  • DOW

    +200.07 (+0.61%)

    -0.09 (-0.12%)

    -5.00 (-0.25%)
  • NIKKEI 225

    +258.55 (+0.93%)

    +90.98 (+0.45%)
  • DAX

    +129.02 (+0.83%)
  • CAC 40

    +71.86 (+0.99%)

LVMH takes aim at Tiffany’s legal action over $16bn takeover

Tiffany sign
Tiffany sign

LVMH has hit back at “feverish and hasty” attempts by Tiffany to fast-track legal proceedings over its $16bn (£12bn) merger, urging a US court to reject the luxury jeweller’s request.

Tiffany filed a lawsuit against LVMH earlier this month after the French owner of brands including Louis Vuitton and Dior abandoned its takeover of the US group.

LVMH, controlled by Europe’s richest man Bernard Arnault, said it was walking away following pressure from the French government amid a threat of US tariffs being imposed on French imports.

It also claimed that the impact of the pandemic and violent protests across America have changed the situation.

Tiffany asked a court in Delaware, where the case has been filed, to expedite proceedings, as it races to push the deal through before its deadline on November 24.

LVMH hit back at the request, arguing there was no need to fast-track the case.

“There are no objective reasons why the upcoming trial should not take place within a reasonable timeframe,” it said.

“By asking the courts to rule urgently - and by communicating feverishly and hastily - Tiffany’s executives are clearly seeking to avoid having to answer, notably to their shareholders, for their bad results and mismanagement and to see their arguments fall one after the other.”

Bernard Arnault | From property to a life in luxury
Bernard Arnault | From property to a life in luxury

LVMH revealed plans to buy Tiffany in November last year, a deal which would have been the largest attempted by 70-year-old Mr Arnault and given his company a significant foothold in the US luxury market.

The proposed takeover raised eyebrows among critics, who questioned whether LVMH was paying too much for Tiffany, particularly as the coronavirus crisis began to hammer demand for luxury goods.

LVMH has claimed that the “material adverse effect” of the crisis are grounds for pulling out of the deal.

It attacked forecasts by Tiffany’s management that its fourth quarter profits this year would come in higher than the same period a year earlier, calling the predictions “purely fanciful, even worrying”.

It added that the jeweller’s upcoming financial results would confirm the "mediocrity of management" during the crisis, accusing them of loading the company with debt.

“The only way to even come close to this target would be to strongly curtail all current investments, particularly in marketing and communications, which is obviously detrimental to the future of the brand and totally contrary to the normal course of business,” LVMH said.

“Tiffany clearly fears a serene and fair rendering of justice. LVMH, for its part, has full confidence in the American justice system to demonstrate that the conditions necessary for the acquisition of Tiffany are no longer met and that the fallacious arguments put forward by Tiffany are unfounded.”

Tiffany has been contacted for comment.