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LVMH countersues Tiffany & Co

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Miguel A. Rodriguez
Miguel A. Rodriguez
29 September 2020
The failed merger became a problem for both companies

After three failed attempts to merge, and a lawsuit intended by Tiffany & Co, the French luxury goods giant LVMH decided to take action.

LVMH filed a lawsuit in Delaware’s Chancery Court in response to the one Tiffany filed earlier this month after the former backed-out of the $16 billion merger. In its filing, LVMH says that Tiffany has been mismanaged during the pandemic and will be vulnerable in the long-term because the jewelry industry is it likely to suffer in the next years. 

According to legal experts, for an acquiring company to be released from honoring a #merger contract, it has to show that the target company underperformed compared to others in its industry. "The pandemic's disruption to the luxury industry and to Tiffany in particular will persist well into 2021 at a bare minimum," LVMH's complaint read. "Tiffany is particularly ill-suited for the challenges ahead," as the American company posted a loss of $45 million in the first six months of the year. 

Moreover, the prospects of LVMH winning the #lawsuit are under question, as the Delaware courts have only once ruled in favor of a buyer to walk away from a previously agreed merger. 

So far, no date has been set for the #trial.

Currently, LVMH is trading 0.51% higher, while Tiffany & Co stock price ended the day at $116.70/share after gaining 0.91%.

Stay in the loop with CAPEX.com! Read here and here the long story of the failed merger!

Sources: ft.com, marketwatch.com, finance.yahoo.com


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.