LVMH to counter-sue Tiffany for 'dishonesty', Companies & Markets News & Top Stories

LVMH to counter-sue Tiffany for 'dishonesty', Companies & Markets News & Top Stories

Tiffany said on Wednesday it would sue LVMH to try and force completion of the takeover.

LVMH says it has been requested by the French Foreign Ministry to delay the Tiffany acquisition to after 6 January 2021, following threats by American president Donald Trump to impose extra fines on French products, making the French government not too eager to face a billion-euro deal between the two countries.

"We believe that LVMH will seek to use any available means in an attempt to avoid closing the transaction on the agreed terms", said Tiffany chairman Roger Farah. The group owns brands like Louis Vuitton and Christian Dior, as well as jewellery houses such as TAG Heuer and Bulgari.

Luxury group LVMH has chose to cancel its acquisition of American jeweller Tiffany's, saying it follows a request by the French government.

Material Adverse Effect clauses are typical in large merger and acquisition deals in case a change in circumstances significantly reduces the value of a company. Since the deal was announced past year, the COVID-19 crisis has hit the global luxury market and trade tensions have flared between the United States and France.

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The Delaware Chancery Court, where Tiffany filed the suit, is known for moving quickly, and Tiffany has asked for an expedited trial so a judge can rule before the merger agreement's November 24 expiration. Tiffany did not immediately respond to an email seeking comment on LVMH's Thursday statement.

On Thursday, LVMH fired back, saying it would sue Tiffany over its management of the COVID-19 pandemic, which forced it to close stores and hammered its sales. It has clearly been prepared by Tiffany a long time ago and communicated in a misleading way to shareholders and is defamatory.

"LVMH will defend itself vigorously".

But for LVMH, essential regulatory filings with EU authorities would take place "as expected, in the following days and this is simply the result of the planning fixed by the European Commission, about which Tiffany is completely aware".

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