L’Occitane International SA, a Hong Kong-listed skincare specialist, announced on Monday that its controlling shareholder, Reinold Geiger, has decided against a potential deal to take the company private, ending speculation about a possible European listing.
Last month, L’Occitane had disclosed a potential buyout offer from Reinold Geiger’s investment holding company, L’Occitane Groupe SA, with a minimum offer price of HK$26.00 ($3.32) per share. Earlier reports had suggested that Geiger was exploring the option of relisting the skincare products group on a European exchange, possibly in the coming year.
Reinold Geiger, an Austrian billionaire, has effectively doubled the sales of the beauty-store chain over the past decade, with L’Occitane now operating 3,000 outlets across 90 countries, specializing in organic beauty products. Nevertheless, despite its growth, the $5.22 billion firm falls behind competitors in the cosmetic sector, particularly in terms of its forward price-to-earnings ratio when compared to French firm L’Oreal SA.
Notably, other companies, such as Italian fashion house Prada SpA, have also explored dual listings, with Prada seeking a listing in Italy alongside its existing Hong Kong listing. Hong Kong has emerged as a focal point for buyout deals, attracting companies with depressed valuations.
As of the end of May, L’Occitane Groupe SA held a 72.5% stake in the skincare firm. L’Occitane is listed in Hong Kong, a period when numerous Western firms seek to expand their presence in the rapidly growing Chinese market.
Shares of the company, which were temporarily halted, are set to resume trading on Tuesday. Last month, Bloomberg News reported that Geiger was considering a potential offer of approximately HK$35 for each L’Occitane share he doesn’t already own. However, the company clarified that if a deal were to proceed, the offer price would be no less than HK$26.00 per share.
L’Occitane initially listed in Hong Kong in 2010, becoming one of the first Western companies to offer its primary shares in the Asian financial hub.
