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The billionaire owner of L’Occitane has made an offer to privatize the skin care company, giving it an enterprise value of around €6.5 billion.
Reinold Geiger, the Austrian who already controls the company, has offered to pay HK$34 per share to buy the rest of the company and delist it from the Hong Kong stock exchange. The last closing price of the stock was HK$29.5.
The deal is worth up to 13.91 billion Hong Kong dollars (1.7 billion euros), the company said on Monday, and the equity is estimated at 6 billion euros. The offer from Geiger and his supporters is final, it said.
Geiger’s Luxembourg-based L’Occitane Groupe already owned 72 percent of the shares at the end of March. The company said Geiger had received commitments from a quarter of remaining shareholders to tender their shares, while another 12.7 percent of them had either sent letters of intent or planned to recommend the offer, the company said.
L’Occitane shares have been suspended since April 9 pending an announcement, but will begin trading again on Tuesday. A committee appointed by its board will evaluate Geiger’s offer and make a recommendation to minority shareholders.
Blackstone and Goldman Sachs Asset Management will provide about 1.5 billion euros in equity financing, while Crédit Agricole will issue debt to support Geiger, according to people familiar with the details.
Blackstone declined to comment. Goldman Sachs Asset Management did not respond to a request for comment.
“The cosmetics industry is undergoing profound change and our company has significantly evolved into a geographically balanced, multi-brand group,” Geiger said in a statement.
“The transaction we are launching today will allow us to focus on restoring the foundations for the long-term, sustainable growth of our business.”
L’Occitane, founded in 1976, has expanded its original skin care business in recent years, purchasing additional brands including perfumer Dr. Vranjes and Sol de Janeiro, a specialist in sun and skin creams. Geiger, chairman of L’Occitane, bought a minority stake in 1994 and increased his stake from then on. The company continues to manufacture products for the L’Occitane brand at its headquarters in Manosque, Provence, France, but has been listed in Hong Kong since 2010.
Geiger in September postponed an earlier plan to delist L’Occitane, causing its share price to fall.
In 2023, the company’s revenue rose 13 percent to 2.13 billion euros, while its shares rose more than 20 percent year-to-date to a market value of HK$43.5 billion before trading was halted. Asia Pacific accounts for 42 percent of total sales, with the remainder split between Europe and the Americas, the fastest growing region.
The global beauty and skincare market has proven resilient despite pressure on consumers from rising interest rates and inflation, with LVMH-owned beauty retailer Sephora and market leader L’Oréal beating expectations in their latest results.
However, China has proven to be a bigger challenge for cosmetics companies due to falling consumer confidence, a worsening economic outlook and strong competition from local brands.