French Foreign Minister Says LVMH Query Led to Letter on Tiffany Deal
September 22 2020 - 5:21PM
Dow Jones News
By Matthew Dalton
PARIS -- French Foreign Minister Jean-Yves Le Drian said he was
responding to a query from LVMH Moët Hennessy Louis Vuitton SE when
he wrote a letter to the luxury conglomerate asking it to delay its
acquisition of Tiffany & Co.
LVMH has blamed its decision to back out of its $16 billion
takeover of Tiffany on Mr. Le Drian's letter, saying it was an
unsolicited and legally binding government order that blocks the
conglomerate from fulfilling the merger agreement.
Appearing before Parliament on Tuesday, Mr. Le Drian said the
letter resulted from a request the luxury company made for
government advice, a remark that calls into question earlier
statements by LVMH.
Aurélien Pradié, a lawmaker with the conservative Les
Republicains party, asked Mr. Le Drian why he sent the letter,
which was addressed to Bernard Arnault, LVMH's chief executive and
controlling shareholder. "You flew to the aid of his board of
directors with no legal basis, no solid argument," Mr. Pradié
said.
Mr. Le Drian said part of his job is to respond to the political
questions of French companies, particularly concerning the U.S.
"My role is to apply, if necessary, the government's opinion on
assessments of a political nature on the management of major
international events to come," Mr. Le Drian said. "This is the
reason why I answered a question from the LVMH group, totally in my
role."
Mr. Le Drian didn't elaborate on the nature of LVMH's query. His
spokeswoman declined to comment further.
LVMH also declined to comment.
Mr. Le Drian's letter, dated Aug. 31, said LVMH should delay its
purchase of Tiffany until Jan. 6. The delay would strengthen
France's hand in tax and trade negotiations with the U.S., Mr. Le
Drian wrote. That would be more than a month after the deadline
stipulated in the merger for completing the agreement.
Before Mr. Le Drian sent his letter, LVMH also approached the
finance minister, France's lead negotiator in tax talks with the
U.S., for help in backing out of its agreement to take over
Tiffany, and was turned down, according to senior French officials.
LVMH denied the outreach to Bruno Le Maire.
After LVMH announced it was pulling out of the deal, Jean
Jacques Guiony, the company's chief financial officer, said Mr. Le
Drian's letter came as a "total surprise."
Tiffany filed a lawsuit against LVMH in the Delaware Chancery
Court, saying Mr. Le Drian's letter was a pretext for LVMH to back
out of the deal. Since then, LVMH has expanded its rationale for
pulling out, saying mismanagement of Tiffany during the coronavirus
pandemic has invalidated the merger agreement -- an allegation
Tiffany denies.
Last Wednesday, LVMH said in a court filing responding to
Tiffany's lawsuit that U.S. legal doctrine precludes courts from
questioning the validity of Mr. Le Drian's letter. The chancery
court on Monday set a Jan. 5 date for the trial.
Write to Matthew Dalton at Matthew.Dalton@wsj.com
(END) Dow Jones Newswires
September 22, 2020 17:06 ET (21:06 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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