EssiLux case calls $8.5 billion GrandVision bid into question

EssilorLuxottica (ESLX.PA) said on Monday that GrandVision’s (GVNV.AS) actions during the coronavirus crisis could provide grounds for ending a 7.2 billion euro ($8.5 billion) takeover of the Dutch eyewear stores operator.

The French-Italian maker of Ray-Ban told a court hearing in Rotterdam that GrandVision had breached agreements by suspending payments to store owners and suppliers and by applying for state aid, without seeking its approval.

“GrandVision agreed to a contractual obligation to not change course. But it changed course drastically,” EssiLux’s lawyer Jeroen Kortmann said in court on Monday.

GrandVision has said it strongly disagrees with EssiLux’s demands, and last month began an arbitration case against its buyer to ensure it complies with its obligations.

This followed legal proceedings by EssiLux, which announced its bid for Grandvision in July 2019..

“We need to know which measures where taken and when, and what their effects were … To see how material their breaches of the agreements were and whether that gives EssiLux the right to rethink the deal,” Kortmann added.

If the deal does not go ahead it would bring an end to Essilux’s ambition to control the Dutch eyewear group’s more than 7,000 outlets across the world.

Source: Reuters

By Bart Meijer & Alexander Smith