LVMH is Backing Out of Tiffany Takeover
The threat of taxes on French products by the United States has paved the way for LVMH to drop its Tiffany takeover. But will it hold up in court?\n\nGo for more market insight, go to https://www.cityindex.co.uk/market-analysis/\n\nCFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
LVMH tries to abandon takeover of Tiffany
LVMH counterclaims Tiffany to dodge what could be the largest takeover in the history of the luxury goods industry – $ 16.2 billion.
In the claim, filed Monday in Delaware USA, it says that LVMH «remains fully confident in its position that the conditions necessary to close the acquisition of Tiffany have not been met. The company believes that the false arguments put forward by Tiffany are completely unfounded.
Recall that in early September, the owner of Louis Vuitton refused to acquire a competitor. The company said it was not ready to complete the acquisition of the jewelry chain «in its current form».
In arguing for its decision, LVMH referred to the threat of US duties on French goods and Tiffany’s request to extend the transaction deadline until the end of the year..
Jewelry chain Tiffany immediately filed a lawsuit to enforce the agreement, claiming that the French government’s request was without legal basis..
LVMH’s court statement mentions the coronavirus crisis that provoked «adverse material effect». The French company also rebuked Tiffany for mismanaging the business..
«Tiffany paid the highest possible dividend while mindlessly wasting funds and reporting losses. No other luxury market participant in the world would have done this during the current crisis.. There are many examples of mismanagement detailed in the application, including cuts in capital and marketing investments and additional debt.», – said in a statement by LVMH on Tuesday.