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Tiffany says LVMH countersuit an attempt to avoid full purchase price
Published Sep 29, 2020 06:52AM ET
Updated Sep 29, 2020 07:22AM ET
(Reuters) - Tiffany & Co said on Tuesday LVMH's countersuit to drop its $16 billion acquisition of the U.S. jeweler was an attempt to avoid paying the full purchase price.
Paris-based LVMH countersued Tiffany on Monday, arguing that its agreement with the company had no carve-out for pandemics under the definition of a so-called material adverse effect. As a result, Tiffany assumed the risk of a virus outbreak, LVMH said.
Disputing LVMH's claim that the "pandemic had devastated Tiffany's business", the U.S. jeweler said it only experienced a single quarter of losses before returning to profitability.
"LVMH cannot show that the steps Tiffany took to protect the health and welfare of its employees and customers during the pandemic violated the Merger Agreement," Tiffany said.
The company said LVMH had still not provided it or the court with a copy of the letter from the French government that prohibited the acquisition prior to its scheduled date.
A U.S. judge last week set a four-day trial on the case beginning Jan. 5. The judge said during a hearing that he hoped Tiffany and LVMH could have "productive discussions to avoid the need for litigation."
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