The feud between Tiffany & Co. and Louis Vuitton Moet Hennessy (LVMH) keeps getting uglier since the latter walked out of a $16.2bn acquisition deal in September. In the recent turn of events, Tiffany & Co. has shot back at the French luxury giant calling its counterclaims ‘baseless and misleading’ in Delaware court.
The two have been fighting since last month as LVMH ended the takeover stating that the French government had requested a delay to assess the threat of proposed U.S. tariffs.
LVMH argued that the US-based luxury jeweler has performed poorly in the pandemic and that the company they wished to buy was no longer the same. It stated that LVMH had the right to leave the deal under the contract. Tiffany responded to LVMH’s counterclaims saying they are nothing but excuses to back out of the deal. “LVMH’s specious arguments are yet another blatant attempt to evade its contractual obligation to pay the agreed-upon price for Tiffany,” said Roger Farah, chairman of the New York-based jewelry company as reported by online website Women Wear Daily. “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,” he continued.
Speaking of the letter from France’s Minister for Europe and Foreign Affairs that ‘asked LVMH to defer transaction,’ LVMH publically asserted that the letter was not solicited by them. However, last week, the minister who signed the letter said that he only sent it out in response to the inquiry from LVMH.Pointing out the evidence of 'bad faith', Tiffany stated that it hasn’t received the copy of the letter in its original French that stated, “LVMH’s seeking this letter was a clear violation of its obligations under the merger agreement, and Tiffany anticipates that more of LVMH’s duplicity will come to light during the trial.”
The trial of this case is set in early January 2021. Till then, we just hope the tiff doesn’t get uglier day by day.