L’Occitane chairman revises privatization bid to garner support from skeptical shareholders

18 Jun 2024 --- L’Occitane updates its privatization bid, offering shareholders the option of receiving HK$34 (US$4.35) per share in cash or ten shares in the new private company for every share held. 

Billionaire chairman Reinold Geiger made the initial privatization bid in April with Blackstone and Goldman Sachs. Geiger currently owns over 70% of L’Occitane’s shares. For the offer to succeed, the company needs the consent of at least 90% of minority shareholders. 

The takeover is worth HK$13.91 billion (US$1.8 billion), while L’Occitane International’s total equity is valued at US$6.4 billion. Geiger reportedly attempted a buyout twice in the last year.

Hesitant to leave
The conglomerate owns L’Occitane en Provence, the Gen-Z body and fragrance line Sol de Janeiro and skin care line Elemis.

Reinold Geiger, chairman, director and majority shareholder of L’Occitane Groupe.Given the success of L’Occitane’s brands, such as Sol de Janeiro, which is expected to reach US$1 billion in retail sales this financial year, some shareholders may feel that the current cash offer undervalues the firm.

The revised offer aims to sway these shareholders, who are reluctant to accept the original cash bid. L’Occitane hopes to incentivize shareholders to support the privatization by offering equity in the new private company.

The company has been listed in Hong Kong since 2010. At the time, it was one of the first Western companies to sell primary shares in the Asian financial hub.

Biological beauty company Grown Alchemist recently left L’Occitane Group to become a privately held company after saying it needed more flexibility. Andre Hoffmann, the former vice-chairman and CEO of L’Occitane International, acquired a majority controlling stake, with Grown Alchemist’s CEO, Anna Teal, taking on a minority shareholder role. The purchase price was €28 million (US$30.4 million).

By Sabine Waldeck