Tiffany Amends Proxy Statement Following Court Challenges

After four shareholders filed lawsuits contesting its planned acquisition by LVMH, Tiffany & Co. amended its original proxy statement to add new information.

In the two months since the acquisition was announced on Nov. 24, the company has been hit by a quartet of shareholder suits, all charging that its original proxy statement omits material information regarding the proposed transaction.

The suits—three of which were filed in Delaware federal court and one in New York federal court—say the omitted information includes the amount of Tiffany’s net debt, the number of outstanding Tiffany shares, and how many transactions financial adviser Goldman Sachs examined before endorsing the acquisition.

“The omission of the above-referenced information renders statements in the Proxy Statement materially incomplete and misleading,” said one complaint, filed on behalf of shareholder Shiva Stein.

In an 8-K filed Jan. 24, Tiffany said it “believes that no additional disclosure is required” and called the suits “without merit.”

However, it said it was proving the info to “moot the disclosure claims” and “to minimize the costs, risks and uncertainties inherent in litigation, to avoid any potential delay of the consummation of merger, and to provide additional information to [its] stockholders.”

The supplement disclosures say that Tiffany’s net debt is approximately $465 million, as of Oct. 31, 2019; it currently has 121–122 million shares of common stock outstanding; and that Goldman Sachs examined 316 transactions before it offered its endorsement.

Such suits are common for large acquisitions of public companies; in 2018, 71% of mergers and acquisitions over $100 million drew shareholder suits, according to research from the Harvard Law School Forum on Corporate Governance.

In November, French conglomerate LVMH agreed to pay $16.2 billion, or $135 a share, for the famed retailer, in what was billed as the largest transaction ever in the luxury sector. Tiffany shareholders are due to vote on the proposed acquisition on Feb. 4.

(Image courtesy of Tiffany & Co.)

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JCK News Director