Coty launches stock offering while progressing dual listing on Paris Stock Exchange

26 Sep 2023 --- Coty has officially launched a significant global offering of 33 million outstanding Class A common stock shares. This comes after the cosmetics and fragrances giant announced in May that it would explore a dual listing in the French capital – home to many luxury houses, including LVMH and L’Oréal – to stimulate European investor interest.

Following the company’s Monday announcement, Coty’s share price fell 1% to US$11.70.

This offering, which follows an effective shelf registration statement filed with the Securities and Exchange Commission, will be accessible to the public in the US and on a private placement basis outside of the US.

Coty is now seeking approval for the listing and trading of its Class A Common Stock, including the shares to be issued through this offering, on the professional segment of the pan-European stock exchange Euronext Paris.

The approval for this listing is contingent upon the French stock market regulator Autorité des marchés financiers  granting a listing prospectus to the owner of brands Burberry, Calvin Klein, Chloé, Davidoff, Gucci, Hugo Boss and Marc Jacobs.

For investors, the offering provides the flexibility to purchase Coty shares either in euros for shares listed on Euronext Paris or US dollars for shares listed on the New York Stock Exchange. 

The foreign exchange rate on the pricing date will be used to determine whether the shares are priced in euros or US dollars. However, it’s important to note that the successful completion of this offering is subject to several conditions, including market and other related factors.

Premium business remains buoyant post-pandemic
Approximately 45% of Coty’s yearly net income is generated in the Europe, Middle East and Africa region.

Recently, the company revised its annual core sales projection upwards, driven by increased pricing and robust demand, especially for premium products within the cosmetics and perfume category. These high-end items include offerings from Hugo Boss, Gucci and Burberry.

Coty has also experienced a positive upturn thanks to the surge in post-pandemic demand for beauty products. It has highlighted that consumers are indulging in smaller luxuries like fragrances and cosmetics despite persistent inflation that has impacted discretionary spending on a global scale.

Coty intends to use the net proceeds from the offering primarily to retire the principal amount of outstanding debt. Other uses include general corporate purposes, such as strategic investments in its business, working capital and capital expenditures.

The company currently intends to manage its outstanding share count through discretionary settlement of one or more of its outstanding total return swaps. Coty expects any such settlement to occur over the next six months and not exceed 27 million shares, although there is no definitive transaction to announce.

BNP Paribas, Crédit Agricole Corporate and Investment Bank, Citigroup and Santander are acting as joint global coordinators and joint book-running managers for the offering and as listing agents in connection with the Paris Listing.

By Benjamin Ferrer