L’Occitane Revises Privatization Bid, Offers Equity in New Company

L’Occitane Revises Privatization Bid, Offers Equity in New Company

THE WHAT? L’Occitane has revised its privatization bid, providing shareholders an option to choose between HK $34 (US$4.35) per share in cash or 10 shares in the new private company for every share held.

THE DETAILS  The initial privatization bid was made in April by billionaire chairman Reinold Geiger, who partnered with Blackstone and Goldman Sachs to fund the US$1.8 billion takeover. Geiger currently owns over 70% of L’Occitane’s shares. The company, which has been listed in Hong Kong since 2010, needs the consent of at least 90% of minority shareholders for the offer to succeed. The cash offer values L’Occitane at US$6.4 billion.

L’Occitane owns several well-known brands, including its namesake L’Occitane en Provence, the skincare line Elemis, and the popular Gen-Z body and fragrance line Sol de Janeiro. Given the success of brands like 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 WHY? The revised offer aims to sway shareholders who are reluctant to accept the original cash bid, believing it doesn’t fully reflect the company’s value. By offering equity in the new private company, L’Occitane hopes to provide an incentive for shareholders to support the privatization.

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