Tiffany fires more salvos in legal dispute with LVMH

Tiffany & Co. is not letting up in its struggle to force French global luxury giant LVMH to follow through on a previously agreed $16.2 billion acquisition.

On Sept. 9, LVMH said it would likely not be able to complete the planned $16.2 billion purchase, citing in part the U.S. threat of tariffs on French goods coming into the U.S. and Tiffany’s request to push back the deal's deadline from Nov. 24 to Dec. 31. (LVMH’s original acquisition agreement called for a deadline of Nov. 24 to complete the transaction.)

The U.S. jeweler fired back with a lawsuit and said LVMH was trying to leverage the retail slowdown caused by the COVID-19 pandemic and the recent “social protests” to seek a lower price. LVMH has since publicly accused Tiffany of “meritless allegations and aggressive misdirection campaign tactics,” while a Delaware Chancery Court has fast-tracked the lawsuit trial to begin Jan. 5, 2021.

In the latest development in this ongoing luxury retail saga, Tiffany is responding to what it calls “baseless and misleading counterclaims” filed by LVMH. Specifically, Tiffany said LVMH is being duplicitous in its claims it did not solicit a letter from a French government official prohibiting the acquisition within the original deadline of the merger agreement, is making a baseless claim that the merger would create an adverse material effect, and that LVMH is wrongly accusing Tiffany of breaching its obligation to conduct its business in the ordinary course through certain dividend payments and limited store closures that resulted from the COVID-19 pandemic.

Tiffany also denied LVMH claims that it improperly drew down debt and said LVMH has interfered in the regulatory approvals process.

“LVMH’s specious arguments are yet another blatant attempt to evade its contractual obligation to pay the agreed-upon price for Tiffany,” said Tiffany chairman of the board Roger Farah. “Tiffany has acted in full compliance with the Merger Agreement, and we are confident the court will agree at trial and require specific performance by LVMH. Had LVMH actually believed the allegations made in its complaint, there would have been no need for LVMH to procure the letter from the French Foreign Minister as an excuse for its refusal to close.”