With the legal battle over governance between Euro-giants Luxottica and Essilor in the background, Dutch takeover target GrandVision, has become the latest target in legal proceedings by the merged giant.
July 18, EssilorLuxottica initiated legal proceedings to access information on how GrandVision has managed its business during the COVID crisis and determine the extent to which the Dutch retail chain has allegedly breached obligations.
In a statement, EssilorLuxottica indicates that, “despite repeated requests, GrandVision has not provided this information on a voluntary basis, leaving it with no other option but to resort to legal proceedings.”
In a responsive statement, GrandVision has acknowledged the proceedings against it, and said, “GrandVision strongly disagrees with these claims and has responded accordingly. GrandVision continues to support EssilorLuxottica with the shared objective to obtain regulatory approval for the closure of the Transaction within 12 to 24 months from the announcement date of 31 July 2019”.
EssilorLuxottica had agreed to buy the rival optical chain nearly one ear ago by purchasing the 76.2 per cent stake from Hal Holding. The acquisition hopes to ad about 7,400 stores globally and more than 39,000 employees to the group.
The deal has been under evaluation by European competition authorities concerned it could lead to reduced competition and higher prices for consumers. The EU is demanding that EssilorLuxottica sell retail stores in Italy and one of France or the Netherlands in order to get the deal passed.
At issue is the financial impact of COVID on business operations, and the possibility of renegotiating a new valuation based on a presumably decline in revenues and profit.
EssilorLuxottica’s share price has fallen 13 per cent in 2020.