Tiffany & Co has won a motion to fast-track its lawsuit over LVMH’s bid to abandon a $16.6bn (£12.9bn) takeover of the US jeweller.
Tiffany earlier this month sought legal action against luxury goods firm LVMH after the Paris-based company said the takeover deal was “no longer possible”.
LVMH, which is owned by French billionaire and Europe’s richest man Bernard Arnault, said the French government had urged it to delay the $16.6bn deal in a bid to help the country settle a trade dispute with the US.
Tiffany argued LVMH is attempting to “run out the clock” on the deal, which must be closed by 24 November, according to the terms of the takeover agreement.
The jeweller claimed a longer timeline for the takeover bid, which is the biggest ever in the luxury sector, would force Tiffany to settle for a lower price or lose out on the deal altogether.
However, a court in Delaware yesterday rejected LVMH’s arguments that it would be “too complicated” to expedite the lawsuit, and set a four-day trial for the start of January.
Richard Pepperman, representing Tiffany, said LVMH was attempting to place the jeweller’s board under “overwhelming pressure” to agree to a reduced price tag. “They want to acquire Tiffany, but at a lower price than what they agreed to,” he said.
Pepperman added that Tiffany was operating under tough trading restrictions in line with the terms of the deal, including limits to its capital expenditure.
However LVMH, which owns brands such as Louis Vuitton, Sephora, Givenchy and Christian Dior, has accused Tiffany of being reckless with cash during the pandemic.
It cited the jeweller’s decision to continue paying $70m in dividends per quarter during the coronavirus crisis, despite reporting a net loss of $32.7m during the first half of 2020.
A spokesperson for LVMH said the company was “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”.
Tiffany’s chairman Roger Farah said the jeweller will “demonstrate to the court that LVMH is in clear breach of its obligations under a valid and binding agreement and that their claim of a material adverse effect is completely baseless.”