LVMH has slammed Tiffany as “ill-suited for the challenges ahead” and branded its prospects “dismal”, according to documents filed in a legal battle between the pair.
LVMH had tabled a $16.6 billion (£14 billion) bid for the iconic jeweller but it is now seeking permission to scrap the deal after arguing it was now a different business to the one it had agreed to buy.
The leading fashion group, which counts Louis Vuitton, Christian Dior and Bulgari in its portfolio, submitted a 97-page court filing in the US state of Delaware shows yesterday.
The Financial Times reported that LVMH was aggrieved by Tiffany’s decisions to slash capital and marketing investments, take on additional debt and pay cash dividends despite the pandemic.
Tiffany has already sued LVMH to try to hold it to the deal, but the wrangle isn’t likely to be decided until early next year unless the pair negotiate a solution before then.
LVMH said in the filing: “Tiffany’s performance will continue to be poor . . . [and its] projections for the fourth quarter of 2020 are dubious given the ongoing and substantial impact of the pandemic, which continues to hamper Tiffany’s sales and shows no signs of abating,.”
LVMH has also accused Tiffany’s management of trying to force the deal through because its top executives stand to profit from the transaction being completed, the FT reported.
Tiffany’s chief executive, Alessandro Bogliolo, would earn $44m (£37m) from the deal, it is claimed.