L’Occitane shares jumped about 13 percent in Hong Kong on Tuesday after its owner offered to take the company private. The upscale cosmetics retailer was established in 1976 in the Provence region of southern France and went public in Hong Kong in 2010. The group’s portfolio includes the brands L’Occitane en Provence, L’Occitane au Brasil, Melvita, Erborian, Sol de Janeiro, Dr. Vranjes Firenze, and Elemis. At HK$32.45 ($4.14), the share price peaked in 2022, more than quadrupling the IPO price.
Austrian billionaire Reinold Geiger said he would buy back all the shares he does not own for nearly US$1.78 billion. The offer, made with the help of US private equity firm Blackstone, concerns about 28% of the shares. It values the corporation at more than USD 6 billion.
The company surged as much as 12.9 percent to HK$33.30 in the morning before trimming its gains. The offer price of HK$34 per share represented a 15.25 percent premium to the closing price of HK$29.50 when the business suspended trading three weeks ago in anticipation of the offer.
Privatization would free the company “from the pressures of the capital markets’ expectations, regulatory costs and disclosure obligations, share price fluctuations, and sensitivity to short-term market and investor sentiment,” the company officials said in the announcement.
Geiger anticipated that significant further marketing investment would be required to revive the brand’s shares in increasingly competitive countries, citing pressure from decreasing consumer mood and rising competition from local brands in China, the company’s second-largest market.
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