The Elysee Palace, the official residence of the French president, allegedly requested the country’s Foreign Minister, Jean-Yves Le Drian, to write a letter to luxury goods company LVMH, advising them to postpone their acquisition of American jeweler Tiffany. This information was revealed by two anonymous sources familiar with the discussions surrounding the letter, as reported by Reuters.

LVMH’s $16 billion deal to purchase Tiffany has faced obstacles, as the French company recently stated that it would not be able to complete the acquisition by the November 24 deadline. This led to a legal clash between the two companies, with LVMH citing trade tensions with the United States and a request from the foreign ministry to delay the deal until January as reasons for the delay. Legal filings from both Tiffany and LVMH indicate that Le Drian signed the letter requesting the postponement.

The sources claim that the Elysee Palace requested Le Drian to draft the letter. However, when approached for comment, the Elysee Palace declined to disclose any information on the matter. The foreign ministry’s spokeswoman redirected inquiries to Le Drian’s representative, who did not respond immediately.

LVMH, when questioned about any communication between the Elysee Palace and the foreign ministry regarding the letter, did not directly address the question. The company’s spokesperson reiterated previous statements, denying that they solicited the letter, and referred to reports suggesting otherwise as malicious rumors.

The luxury sector has been greatly affected by the ongoing COVID-19 pandemic. There have been speculations about whether LVMH overpaid with its offer of $135 per share for Tiffany. LVMH argued that Tiffany’s performance in the first half of 2020 underperformed their own comparable brands and that the U.S. jeweler’s prospects for the rest of the year were disappointing.

In response, Tiffany filed a lawsuit in Delaware to compel the completion of the deal. The company claimed that updated forecasts provided to LVMH in August 2020 projected better earnings for the fourth quarter, indicating a quick recovery and surpassing of pre-pandemic performance.

In June, sources revealed that LVMH’s owner, billionaire Bernard Arnault, had been exploring options to renegotiate the deal’s price. However, LVMH has since denied these claims. Analysts speculate that the two parties may still agree to close the deal at a lower price, but there are also rumors that Arnault may have shifted his focus to a different target.

Useful Links:
1. Reuters: Elysee Palace requested delay in Tiffany-LVMH deal, sources say
2. Bloomberg: Luxury Giant LVMH Misses Deadline for Tiffany Deal