Source: Wall Street News
Following the suspension of trading on April 9, L'Occitane shares are expected to resume trading on April 30. L'Occitane Chairman Geiger decided to privatize L'Occitane at a premium of 61% higher than the average price in the 60 days before the public offer. If the acquisition is successful, L'Occitane will be delisted from the Hong Kong stock market, ending its 14-year listing history. On April 30, L'Occitane surged nearly 13%.
$L'OCCITANE (00973.HK)$Chairman Reinold Geiger announced plans to privatize the skincare brand and delist it from the Hong Kong market. If the acquisition is successful, L'Occitane will end its 14-year “listing history” in Hong Kong.
According to a statement on April 29, Geiger proposed to buy shares in L'Occitane that he does not yet hold at a price of HK$34 per share. This offer is 61% higher than the average price in the 60 days before his public offer. Furthermore, the total valuation of this transaction is about 6 billion euros (about 6.4 billion US dollars), and it has received support from several shareholders.
As for the main reason for this privatization, L'Occitane said that in the current situation where competition in the global skincare and cosmetics industry is becoming increasingly fierce, the current management team hopes to promote the company's long-term strategy more flexibly and not be bound by short-term interests in the open market, so as to better achieve the brand's global expansion and market deepening.
Exchange documents show that Geiger has controlled more than 70% of the company's shares through a tool. According to information, the support of at least 90% of shareholders without conflicts of interest (that is, those not controlled by Geiger through its investment tools) is required for privatization to continue.
Currently, two investment companies (ACATIS Investment and Global Alpha Capital Management) jointly hold 28.69% of L'Occitane's shares. They have clearly indicated their support for Geiger's privatization plan, and their commitment is irrevocable. In addition, several other shareholders have agreed to participate in this share purchase.
According to reports, Geiger plans to use financing provided by a number of large financial institutions to acquire the remaining shares in L'Occitane, including the Blackstone Group Tactical Opportunity Fund and financing provided by Goldman Sachs Group's asset management department, as well as external debt provided by Crédit Agricole.
L'Occitane has been suspended since April 9 due to the upcoming announcement of the acquisition. The stock closed at HK$29.50 per share the day before the suspension of trading, with a market capitalization of approximately US$5.6 billion. L'Occitane shares are expected to resume trading on April 30.
According to public information, L'Occitane was founded by Frenchman Olivier Baussan in 1976 in Provence, France. He initially made essential oils by distilling local plants, such as lavender, and sold these products in local markets. Geiger became a minority shareholder in 1994, and later, due to dissatisfaction with the company's performance, he decided to personally intervene in the management of the company to protect his investment.
Driven by Geiger, L'Occitane conducted an initial public offering in Hong Kong in 2010 and quickly expanded to 90 countries around the world, with 8 brands and around 3,000 sales locations. Among them, the American region is growing the fastest.
L'Occitane was nearly 13% higher. As of press time, L'Occitane had surged nearly 10%.
editor/tolk