L’Occitane International SA’s controlling shareholder is in advanced talks on a potential deal to take the skin-care company private at a valuation of around $6.5 billion, people familiar with the matter said.
(Bloomberg) — L’Occitane International SA’s controlling shareholder is in advanced talks on a potential deal to take the skin-care company private at a valuation of around $6.5 billion, people familiar with the matter said.
Billionaire Chairman Reinold Geiger has been discussing a possible offer of as much as HK$35 for each L’Occitane share he doesn’t already own, according to the people. Deliberations are ongoing, and the eventual proposal could end up being slightly lower, the people said, asking not to be identified because the information is private.
A bid at that level would represent a 37% premium to Tuesday’s 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 people said. A vehicle ultimately controlled by Geiger owns more than 70% 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 people said. Geiger could still decide against proceeding with an offer, the people said.
A representative for L’Occitane didn’t immediately respond to a request for comment. Geiger also didn’t respond to queries.
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 privatize 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 Co. received a take-private proposal from its controlling shareholder in June, and big-screen cinema company Imax Corp. is also seeking to take full control of its listed Chinese business.
The value of deals in the consumer sector has fallen 28% to $593 billion this year, according to data compiled by Bloomberg. That’s a less severe decline than the 40% drop across all dealmaking, the data show.
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L’Occitane, which is based in Luxembourg and Geneva, and its backers raised $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-aging serums and Korean skin-care brand Erborian.
(Updates pricing detail in second paragraph, adds deal volumes in 10th paragraph.)
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