© Reuters. FILE PHOTO: A luxury group LVMH logo will appear ahead of the 2019 results announcement in Paris
PARIS (Reuters) – France's Presidential Palace has asked Foreign Minister Jean-Yves Le Drian to send a letter to luxury goods company LVMH (PA 🙂 asking it to postpone its takeover of US jeweler Tiffany, two sources linked with discussions are familiar about the letter, reported Reuters.
LVMH's $ 16 billion purchase of Tiffany (N 🙂 was successful earlier this month after the French company announced it would not close the deal by November 24, sparking legal battle between the two companies.
LVMH partially cited an official motion from the State Department to postpone the conclusion of the deal until January due to trade tensions with the United States. The letter requesting the delay was signed by Le Drian in accordance with United States acts by Tiffany and LVMH.
According to the two sources, who spoke on condition of anonymity, the Elysee Palace, the office of President Emmanuel Macron, had asked Le Drian to produce the letter.
The Elysee declined to comment. A State Department spokeswoman referred inquiries to a Le Drian representative, who did not respond immediately.
When asked by Reuters about interactions between the Elysee Palace and the State Department in connection with the letter, LVMH did not directly address the question.
An LVMH spokesman echoed previous statements denying the company requested the letter and said the rumors were malicious.
"We formally deny these baseless rumors," he said, referring to reports that LVMH had a role in the letter.
The spread of the coronavirus has dealt a severe blow to the luxury industry, raising questions about whether LVMH has overpaid with its $ 135 per share offering.
LVMH said after the deal fell apart that Tiffany had lagged significantly behind LVMH's comparable brands in the first half of 2020 and said the US group’s outlook for 2020 was "very disappointing".
In a lawsuit filed in Delaware to enforce the deal, Tiffany said updated projections that LVMH put in August 2020 forecast the jeweler's revenue for the fourth quarter of 2020 would be higher than last year, a swift return to it and an excess shows of its pre-pandemic performance.
Sources told Reuters in June that LVMH billionaire Bernard Arnault, a shrewd deal maker known as the "Wolf in Kashmir" who built an empire through acquisitions, was looking for ways to renegotiate the price of the deal.
LVMH has since denied this.
Analysts have said the two sides could still agree to close the deal at a lower price, though some haven't ruled out that Arnault may already be targeting other loot.
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