L’Occitane boss in advanced talks on US$6.5 billion buyout
L’OCCITANE International’s controlling shareholder is in advanced talks on a potential deal to take the skin-care company private at a valuation of around US$6.5 billion, people familiar with the matter said.
Billionaire chairman Reinold Geiger has been discussing a possible offer of about HK$35 for each L’Occitane share he doesn’t already own, said the sources, who asked not to be identified as the information is private. A bid at that level would represent a 37 per cent premium to Tuesday’s (Aug 8) closing price in Hong Kong.
Geiger has lined up financing for the proposed bid and could announce a deal as soon as the coming days if he decides to move ahead, the sources said. A vehicle ultimately controlled by Geiger owns more than 70 per cent of L’Occitane, exchange filings show.
L’Occitane shares were suspended from trading before the Hong Kong market open on Wednesday, pending the release of an announcement.
Geiger has been speaking to advisers about the possibility of relisting L’Occitane on a European exchange as soon as next year depending on market conditions, one of the sources said. Deliberations are ongoing and Geiger could still decide against proceeding with an offer, the sources said.
A representative for L’Occitane didn’t immediately respond to a request for comment. Geiger also didn’t respond to queries.
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Bloomberg News reported last month that Geiger is studying the possibility of taking the company private. The company confirmed its controlling shareholder reviews options from time to time, saying it hasn’t yet received any proposal to privatise or restructure the group.
A take-private of L’Occitane would add to a series of similar deals in Hong Kong as valuations remain depressed. Chinese snack maker Dali Foods Group received a take-private proposal from its controlling shareholder in June, and big-screen cinema company Imax is also seeking to take full control of its listed Chinese business.
L’Occitane, which is based in Luxembourg and Geneva, and its backers raised US$787 million in the company’s 2010 initial public offering. It listed in Hong Kong at a time when a number of Western consumer companies were seeking to boost exposure to the fast-growing consumer market in China.
The company’s portfolio includes L’Occitane en Provence, inspired by the lavender fields of southern France, and Melvita organic beauty products. It also owns the Elemis line of collagen creams, as well as the Grown Alchemist range of anti-ageing serums and Korean skin-care brand Erborian. BLOOMBERG
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