Paris (AFP)

The luxury giant LVMH on Monday launched the legal counter-attack against Tiffany, justifying its decision not to buy the jeweler by its mismanagement in times of pandemic and by a request from the French government.

"LVMH filed its findings with the Delaware Court of Justice last night," the French group said in a statement Tuesday morning, confirming information from Bloomberg the day before.

"The group is confident in its ability to demonstrate that the conditions for the completion of the acquisition are not met and that the fallacious arguments supported by Tiffany are completely unfounded," the statement continued.

"The pandemic - whose effects for Tiffany are catastrophic and lasting - is undeniably a significantly unfavorable situation" and this clause known as MAE (Material adverse effect) in the field of mergers and acquisitions, "is enough to prevent the realization of the operation, ”he explains.

"Like a large majority of acquisition contracts, the agreement signed in November 2019" includes this clause "provided that the event invoked under this clause has not been explicitly excluded by the parties ", details LVMH.

However "the absence of the mention of an exclusion of the pandemic in the definition of the significantly unfavorable event in the agreement concluded with Tiffany is indisputable", underlines the giant of the luxury.

If certain events "such as cyber attacks, the movement of yellow vests or demonstrations in Hong Kong" had been planned, this is not the case for a health crisis "while hundreds of merger agreements carried out over the past ten years provide for this specific mention ", adds the press release.

The group also takes the example, in its complaint consulted by AFP, of a contract at 6.8 billion dollars, "executed the day before" that with LVMH, and negotiated by the lawyers representing Tiffany, which provided for this exclusion.

Another criticism leveled against the American jeweler is the payment of a high dividend at a time when the company saw its cash flow melting and suffering losses.

LVMH had announced at the beginning of September that it was "no longer able" to buy the jeweler as planned for 16.2 billion dollars, relying in particular on a letter from the French Minister of Foreign Affairs asking it to defer the acquisition to look at the ongoing trade war with the United States.

Minister Jean-Yves Le Drian then assured him before the French deputies that he had with this letter "responded to a request from the LVMH group."

Tiffany retaliated by accusing LVMH, in a Delaware court, of having dragged out regulatory proceedings so as not to have to honor its commitments and to lower the purchase price.

The group of billionaire Bernard Arnault had already announced its intention not to stop there and to seize in turn American justice.

He therefore implemented this threat on Monday by filing a new document with the court.

Contacted Monday evening by AFP, Tiffany did not wish to comment immediately.

The American justice fixed last week at January 5, 2021 as the date of the trial to oppose the two groups, however suggesting that the two parties resume dialogue.

© 2020 AFP