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LVMH countersues Tiffany over cancelled US$16b buyout
[NEW YORK] LVMH countersued Tiffany & Co weeks after pulling out of its US$16 billion purchase of the iconic New York-based jeweller, saying it decision was driven by the French government's request to delay the deal's closing and Tiffany's mismanagement during the pandemic.
The maker of Louis Vuitton bags and Moet & Chandon Champagne contends Tiffany's business was devastated by the coronavirus outbreak and that provides proper grounds to nix the buyout, according to a filing Monday in Delaware Chancery Court.
Tiffany sued LVMH earlier this month to force it go forward with the deal, saying in a court filing that LVMH is trying to use the pandemic-induced downturn in the luxury sector to negotiate a lower acquisition price.
In its counterclaims, LVMH also cited a letter from France's foreign minister seeking a delay in closing the transaction as part of a trade war with the US. The letter amounts to a "legal restraint" under the terms of the buyout that prohibits the deal from closing by a Nov 24 deadline, LVMH's lawyers noted in the 96-page filing.
Tiffany executives said they couldn't immediately comment Monday on LVMH's countersuit. They have said in earlier filings that LVMH was using the letter as a pretext to wrongfully pull out of the purchase.
The deal was announced last November, but friction between LVMH and Tiffany emerged in March as the depth of the economic fallout from the pandemic became apparent.
Judge Joseph Slights III has set a Jan 5 non-jury trial to decide whether LVMH must consummate the sale.
The case is Tiffany & Co v LVMH Moet-Hennessy-Louis Vuitton SE, 2020-0768, Delaware Chancery Court (Dover).