After the pandemic postponed for three times the takeover, LVMH, French luxury goods exponent, finally stepped away from the deal with Tiffany & Co.
According to Bernard Arnault, the chief of the French group, the board had received a letter from the French foreign ministry through which it was asked to postpone the takeover after January 6, 2021, given the fact that the US is threatening to impose additional tariffs on French products. However, the LVMH CFO, Jean Jacques Guiony, dismissed the idea that the company used the letter as an excuse to get out of the $16 billion deal.
From a financial point of view, Tiffany became unattractive during the past months, as its sales were affected by the pandemic. Its latest quarterly performance was called "lackluster" by Guiony.
Tiffany quickly responded to the new situation by filing a lawsuit against LVMH in Delaware (the state where the jeweler is registered). According to experts, it is an attempt to force LVMH to live up to its word and close the deal. According to the filing, Tiffany refutes LVMH's statement of breaching contract.
Following the news, LVMH stock price fell 0.48%. Tiffany closed the American session 6.44% lower.
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Sources: investing.com, finance.yahoo.com