L’Occitane Chairman Launches Buyout at €6 Billion Valuation
(Bloomberg) -- Reinold Geiger, the billionaire owner of L’Occitane International SA, wants to take the skin-care company private in a move that could end its 14-year run on the Hong Kong stock exchange.
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The Austrian is offering HK$34 a share for the L’Occitane shares he doesn’t already own, according to a statement Monday, which confirmed an earlier report by Bloomberg News. This represents a premium of 61% to the 60-day undisturbed share price of the luxury retailer of French-themed body, face, hair, fragrance and home products.
The deal values L’Occitane at €6 billion ($6.4 billion) on an equity basis and has already received backing from several shareholders.
L’Occitane resumed trading in Hong Kong on Tuesday after a three-week suspension, rising as much as 13% to HK$33.3, the highest since January 2022.
Geiger, who became a shareholder in L’Occitane about 30 years ago and is now its chairman, will fund the buyout with financing from Blackstone Inc.’s tactical opportunities fund and Goldman Sachs Group Inc.’s asset management arm. External debt will also be provided by Credit Agricole Corporate and Investment Bank.
Global dealmaking in the consumer industry has risen 18% this year to $400 billion, according to data compiled by Bloomberg. L’Occitane was founded in 1976 by Frenchman Olivier Baussan, who started out making essential oils from plants like lavender in the Provence countryside and selling them at local markets. Geiger became a minority shareholder in 1994, but has said the company’s poor performance prompted him to start working there to safeguard his investment.
The retailer was listed in Hong Kong in a 2010 initial public offering and now has eight brands and some 3,000 locations in 90 countries. Its fastest growing region is the Americas.
Geiger already controls more than 70% of the company through a vehicle, exchange filings show. ACATIS Investment and Global Alpha Capital Management Ltd., which between them hold 28.69%, have given irrevocable support for the deal. Several other shareholders have also agreed to participate in the tender. At least 90% of disinterested shareholders need to support the take-private for it to go ahead.
Greater Flexibility
L’Occitane, which is headquartered in Luxembourg and Geneva, said delisting will allow the current management team greater flexibility to invest in long-term sustainable growth initiatives and pursue strategic investments. The company said that greater flexibility, free of the pressures of capital markets’ expectations, is particularly important now given the intensifying competition in the global skincare and cosmetics industry.
Trading of L’Occitane was suspended in Hong Kong on April 9, pending an announcement related to takeover codes. The stock closed at HK$29.50 a day before the suspension, giving the company a market value of about $5.6 billion. Tuesday’s gain lifted that to about $6.2 billion.
Other companies are also said to be reconsidering the wisdom of listing in Hong Kong, as valuations sag. Many firms listed in the city are trading at a discount to Europe and the US.
Read More: Bankers Find One Bright Spot in Hong Kong as Buyouts Multiply
--With assistance from Deirdre Hipwell and Michael Hytha.
(Updates with resumption of trading in shares in fourth paragraph.)
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