DEBT FINANCING. Swatch Group ends partnership with Tiffany

Zurich (Reuters)-Swatch Group (UHR.VX) said that she ended her Alliance with Tiffany & Co (TIF.N), blame the jeweler U.S. to block the development of its watch joint venture and revive speculation that Tiffany could become a takeover target.
Sample group Chairman Nayla Hayek told Reuters in March that Tiffany Watch Co., established in 2007 to produce Swiss-made watches under the brand Tiffany, was not as successful as expected because the clocks were not well displayed in stores from Tiffany.
World's largest watchmaker "swatch Group and Tiffany Watch Co. Ltd will press for damages against Tiffany & Co., New York, in compensation for loss of future business in the long term planned," said in a statement on Monday.
Tiffany & Co. was not immediately available for comment.
The strategic alliance, signed for an initial period of 20 years, was designed to promote the development, production and worldwide distribution of Tiffany brand watches and watch various collections since then had been released.
Kepler Capital Markets analyst Jon Cox said he hoped that costs about 20 million Swiss francs (US $ $22,7 million) associated with terminating the venture, which was effectively controlled by the Swatch Group while Tiffany received a royalty.
"In addition, the movement will likely be renewed speculation of a takeover of Tiffany given Swatch Group watch deal was seen as a possible obstacle," he said.
Cox said that Swatch Group had lost its trademark single real gem. "(This) is disappointing and could lead to speculation of a joint venture elsewhere in the sector," he said, citing the diamond miner and retailer Harry Winston (HW.TO) as a possible partner.
Shares of Swatch Group were down 1.5 percent in 1104 GMT, outperforming an index STOXX Europe 600 Personal & Household goods weaker of 2.2%.SXQP.
Vontobel analyst René Weber said he estimated sales of Tiffany clock at about 30 million francs in 2010. "There was a potential 300-400 million francs," he said.
(US $ 1 = 0.883 Swiss francs)

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