In 2019, LVMH and TIFFANY had announced their engagement. The French luxury goods group LVMH planned to buy the Tiffany company, a specialist in jewellery and tableware. But very early on, the break-up of this future union was caused by the deterioration in the value of Tiffany. This triggered legal proceedings which will begin in January 2021.
A few months after the announcement of their merger in 2019, the LVMH group retracts its plan to buy Tiffany, disappointed by the negative impacts of the coronavirus-related health crisis on Tiffany and the trade war. For its part, Tiffany orders LVMH to respect its commitments, hence the ongoing legal battle.
To settle this dispute between the two companies, the Delaware Court of Justice issued a concurring decision. As LVMH had wished, the Court announces that the trial will not be rushed and will begin in January 2021. Thus, from January 5, 2021, a major trial will oppose the Tiffany group to LVMH and will last 4 days. Contrary to its opponent, Tiffany was rather asking for a trial for November 2020.
On November 24, 2019, LVMH signed an agreement under which it committed to launch a takeover bid (OPA) at a price of $135 (115 euros) per share, valuing the jeweler at $16.2 billion. And this, before November 24, 2020. But on September 9, the world's number one luxury goods company announced that it was abandoning this operation. An announcement made by its CEO in person, Bernard Arnaud.
Considering that the announcement of the takeover has been made since 2019, Tiffany finds it unacceptable that its competitor should withdraw in the middle of the negotiations. LVMH condemns the group for its mismanagement during the health crisis and plans to present the evidence in the coming months. For him, this mismanagement constitutes a Material Adverse Effect. Then, during the four days of the trial, he will have the opportunity to demonstrate to the court that Tiffany's accusations are unfounded.
Moreover, the outcome of this trial will make it possible to separate the two groups in their different positions. A cancellation of the takeover project or its relaunch are possible solutions.
After announcing its withdrawal from the operation in September, the American jeweller asked LVMH to respect its commitments.
The first part of this legal battle between LVMH and TIFFANY concerns the issue of deadlines. The group of French billionaire Bernard Arnault has pleaded for a normal procedure. Meanwhile, the American jeweller Tiffany wants an accelerated procedure. He therefore proposes to the court to render a decision before November 24, 2020, the closing date of the operation.
The first hearing in this dispute between Tiffany and LVMH took place on September 21. Following various pleadings by the lawyers, the judge set the trial date for January 5, 2021. A date that corresponds more or less to LMVH's wishes.