L’Occitane owner offers to take skincare group private at €6.5bn valuation

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The billionaire owner of L’Occitane has made an offer to take the skincare company private in a deal that gives it an enterprise value of about €6.5bn.

Reinold Geiger, the Austrian who already controls the company, has offered to pay HK$34 per share to buy the rest of the business and delist it from the Hong Kong stock exchange. Its most recent closing share price was HK$29.5. 

The deal is worth up to HK$13.91bn (€1.7bn), the company said on Monday, and values its equity at €6bn. The offer from Geiger and his backers was final, it added. 

Geiger’s L’Occitane Groupe, which is based in Luxembourg, already owned 72 per cent of the shares as of the end of March. The company said Geiger had secured commitments from a quarter of the remaining shareholders to tender their stock, while another 12.7 per cent 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 €1.5bn in debt financing, according to people familiar with the details. Crédit Agricole will also provide debt financing to back Geiger.

Blackstone declined to comment. Goldman Sachs Asset Management did not respond to a request for comment. 

“The cosmetics sector is undergoing profound changes, and our company has significantly transformed into a geographically balanced multi-brand group,” Geiger said in a statement. 

“The transaction we are launching today will allow us to focus on rebuilding the foundations for the long-term sustainable growth of our business.”

L’Occitane, which was founded in 1976, has expanded from its initial skincare business to buy other brands in recent years, including perfumer Dr Vranjes and Sol de Janeiro, a sun and skin cream specialist. Geiger, who is L’Occitane’s chair, bought a minority stake in 1994 and increased his shareholding from there. The company continues to manufacture products for the L’Occitane brand at its home base in Manosque, in France’s Provence region, but has been listed in Hong Kong since 2010. 

Geiger shelved an earlier plan to delist L’Occitane in September, causing shares to fall. 

In 2023, the company’s sales increased by 13 per cent to €2.13bn, while its shares have risen by more than 20 per cent since the start of the year for a market value of HK$43.5bn before trading was suspended. Asia Pacific makes up 42 per cent of total sales, with the rest spread across Europe and the Americas, its fastest-growing region. 

The global market for beauty and skincare has proved 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 most recent results.

However, China has proved more challenging for beauty companies because of deteriorating consumer confidence, the darkening economic outlook and tough competition from local brands.

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