-LVMH plans to file a lawsuit against former acquisition target Tiffany & Co over its management during the coronavirus pandemic

-LVMH said it would pull out of its acquisition of Tiffany, which has filed a lawsuit to try and enforce the deal

-The French giant said it considers the U.S. jeweler's legal action in Delaware to be unfounded

 

By Giulia Petroni

 

LVMH Moet Hennessy Louis Vuitton SE said Thursday that it plans to countersue Tiffany & Co. over the U.S. jeweler's management of its business during the pandemic, a day after the French company said it was pulling out of a merger deal.

The luxury-goods giant said its board examined Tiffany's current economic situation and found its first-half results and outlook for this year to be "very disappointing and significantly inferior to those of comparable brands of the LVMH group."

It added Tiffany didn't follow an ordinary course of business, particularly by distributing substantial dividends while booking losses.

"LVMH will be therefore led to challenge the handling of the crisis by Tiffany's management and its board of directors," the company said.

The news comes after LVMH on Wednesday said it was backing out of its $16.2 billion takeover deal for the company, claiming that both Tiffany and the French government asked to delay the acquisition beyond the agreed deadline.

Tiffany on Wednesday said it filed a lawsuit in Delaware to enforce the agreement, alleging that LVMH was using a letter received from the French government as a pretext to back out of the deal.

LVMH said it was surprised by Tiffany's legal action, which it considers to be "totally unfounded," and reiterated that the conditions necessary for the acquisition deal haven't been fulfilled.

LVMH said it also plans to file its lawsuit in Delaware.

 

Write to Giulia Petroni at giulia.petroni@wsj.com

 

(END) Dow Jones Newswires

September 10, 2020 08:48 ET (12:48 GMT)

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