On Wednesday, the world’s largest luxury group responded to the American fine jeweller’s request to expedite its lawsuit against LVMH — which said it cannot honour the deal it struck in November 2019 — by asking the court to delay the trial by "six to seven months," according to a release sent by Tiffany.
LVMH has made it clear that it no longer believes that Tiffany is worth the $135 per share that it agreed to pay, neglecting to seek regulatory approval in Europe and citing everything from social and economic unrest, as well as trade tensions between the US and France, as reasons to renegotiate the deal — or end it altogether.
Last week, Tiffany sued LVMH in a Delaware chancery court, claiming that it has not honoured the original agreement and that it should also be responsible for paying additional fees for failing to close the deal at the mutually agreed upon time of mid-summer. LVMH said it plans to countersue, but has yet to do so. Meanwhile, Tiffany put in a request to the court to expedite the trial so that the deal could close before it expires in November.
“For many months, LVMH has been grasping at any opportunity to delay and avoid its obligations,” Tiffany Board Chairman Roger Farah said in a statement. “LVMH’s shifting explanations indicate bad faith in its dealings with Tiffany and are nothing more than distractions meant to hide its efforts to run out the clock and avoid fulfilling its obligations.”
LVMH representatives in both the US and France did not immediately respond to a request for comment.
Financial analysts and legal experts say that it is no surprise LVMH — led by Chairman and Chief Executive Bernard Arnault — has attempted to negotiate a better deal with Tiffany. The original agreement was brokered at the height of the market, months before the pandemic, which demolished sales of luxury goods, especially in the first quarter of 2020.
“Given that there’s this lawsuit, Arnault is going to be really angry and he’s going to go away for a while,” said Kathryn Rudie Harrigan, a professor at Columbia Business School. “It seems that Arnault has lost his enthusiasm, at least temporarily.”
But Arnault, and LVMH, have been interested in owning Tiffany, one of few remaining independent jewellery brands with global recognition, for some time. The Tiffany board appears to be dedicated to seeing the deal through at the original price, and before the November expiration date.
The court’s hearing on whether to expedite the trial is set to take place September 21 at 3pm EST.
Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.