The engagement between Tiffany and LVMH Moët Hennessy Louis Vuitton seems to be off. The French luxury giant said it likely won’t be able to complete its planned $16.2 billion acquisition of the American jeweler after France’s Minister for Europe and Foreign Affairs asked LVMH to defer the transaction beyond Jan. 6, 2021. The request was made in the wake of a U.S. threat to slap tariffs on a range of French products. LVMH noted that its original acquisition agreement called for a deadline of Nov. 24 to complete the transaction.
But however it plays out, the early phase of the dispute already has been filled with vitriol with Tiffany’s chairman saying LMVH has unclean hands, and LVMH’s finance director sneering as only the French can at Tiffany paying a dividend when it was losing money. Guiony was pressed to explain if LVMH had, as Tiffany contends, dragged its feet in trying to get merger clearance in several jurisdictions, including the European Union.
Tiffany investors were already skittish and grew more so, sending shares of the jeweler down 6.4 percent to $113.96 Wednesday, well below the $135 deal price. Shares of LVMH largely held their ground, slipping just 0.09 percent for the day to 404.05 euros. As for Tiffany’s response to LVMH’s move it immediately went to court in Delaware. But Guiony questioned whether the judge could “consider that a valid French letter from a minister could be something that we as a French company should ignore.”
With the suit, the jeweler said it was trying to compel LVMH to “abide by its contractual obligation under the merger agreement.”