A US court has approved Tiffany & Co.’s request to fast-track its lawsuit against LVMH, scheduling a four-day trial starting January 5, 2021.
The timeline means a ruling would come after the final deadline for LVMH’s takeover of Tiffany, but before antitrust approvals for the deal begin to expire. The US jeweler had asked for the trial to take place even sooner, before the deal’s November 24 termination date, while the French luxury group had sought to delay the proceedings for several months.
“We appreciate the court’s ruling today to expedite the process,” Tiffany chairman Roger Farah said Monday. “Despite LVMH’s ongoing efforts to avoid paying the agreed-upon price for Tiffany, a trial on January 5, 2021, will hopefully lead to a ruling prior to the expiration of US antitrust clearance on February 3, 2021, and enable us to protect our company and our shareholders.”
LVMH pulled out of the $16 billion transaction earlier this month, citing a letter from the French government urging it to delay closing until after the deadline due to a trade dispute with the US. However, Tiffany claimed LVMH was intentionally stalling the deal so the deadline would pass and it could renegotiate a new takeover at a lower price, adding that the government instructions were not binding.
LVMH later accused Tiffany of mismanagement during the Covid-19 pandemic, and plans to argue to the court that this constituted a “material adverse effect” enabling the buyer to renege on the deal. Tiffany rejected this and accused its sparring partner of breaching the agreement by failing to obtain antitrust approvals promptly.
However, LVMH said it would close the deal if the court found that it could not abandon it, despite the trial occurring after the transaction deadline, Reuters reported, citing court papers.
“LVMH is fully confident that it will be able to defeat Tiffany’s accusations and convince the court that the conditions necessary for the acquisition of Tiffany are no longer met,” the French company said in a statement Monday. “In this regard, in the coming months, LVMH will demonstrate to the American justice system that the mismanagement of Tiffany during the Covid-19 crisis constitutes a material adverse effect.”