L’Occitane International S.A. announces privatization plan by major shareholder
In a significant move in the cosmetics industry, L’Occitane International S.A., listed under Stock Code: 0973.HK, announced that its controlling shareholder, L’Occitane Groupe S.A., has proposed to privatize the company by acquiring all shares it does not already possess. The offer, pegged at HK$34.00 per share, aims to delist the company from the Hong Kong Stock Exchange, positioning it for strategic long-term growth as a privately held entity.
This offer represents a premium of approximately 30.77% over the undisturbed closing price as of February 5, 2024, and even higher premiums compared to the average closing prices leading up to this announcement, marking a compelling opportunity for shareholders to realize their investments at favorable valuations amidst uncertain market conditions.
Reinold Geiger, the Chairman of both the Offeror and L’Occitane International, underlined the strategic intent behind this move, noting the need to shield the company from the short-term pressures of public markets and focus on long-term sustainable growth. He remarked, “Our family has always taken a responsible, long-term view when it comes to developing our company. The cosmetics sector is undergoing profound changes, and our company has significantly transformed into a geographically balanced multi-brand group, marked by strategic acquisitions such as ELEMIS, Sol de Janeiro, and, most recently, Dr. Vranjes Firenze. The transaction we are launching today will enable us to focus on rebuilding the foundation for the long-term sustainable growth of our company.”
Financing for this substantial buyout will be sourced from a combination of external debt facilities provided by Crédit Agricole Corporate and Investment Bank, with additional capital from Blackstone Inc. and Goldman Sachs Asset Management International.
An Independent Board Committee, composed of non-executive directors, has been tasked with evaluating the fairness of the offer. Their recommendations will be detailed in a forthcoming Composite Document, which will mark the official start of the offer period.
This privatization strategy not only aims to enhance operational flexibility and strategic agility but also underscores a commitment to the long-term prospects of L’Occitane International S.A. in the competitive global skincare and cosmetics market. The planned delisting is anticipated to allow the company to more effectively implement strategies essential for its growth, free from the typical constraints faced by publicly traded entities.
This move by L’Occitane International S.A. and its major shareholder indicates a clear strategy to adapt to the dynamic conditions of the global market while ensuring the brand’s longevity and continued innovation in the beauty sector.