(qlmbusinessnews.com Mon, 14th Aug, 2023) London, UK —
The value of shares in L'Occitane International, a prominent skincare chain, experienced a significant increase following the revelation that its billionaire chairman is contemplating the idea of making the company privately owned.
On Friday, the company officially confirmed that Reinold Geiger, who holds a substantial stake in the business, is exploring the possibility of acquiring the remaining shares currently not under his control.
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Currently, Mr. Geiger commands ownership of nearly three-quarters of the company's shares.
L'Occitane operates a vast network of over 3,000 retail establishments spanning 90 countries, and its workforce comprises more than 8,500 employees.
The closing price of its shares exhibited a more than 8% surge, reaching HK$27.75 on the Hong Kong stock market by Monday.
The L'Occitane en Provence line has earned recognition for its signature yellow branding and opulent range of creams, soaps, and oils. The brand has undergone remarkable growth since its inception within a small truck in the markets of Provence, France.
Notably, the group has expanded to encompass brands such as Elemis collagen products and the Korean skincare label Erborian. In its most recent annual report, L'Occitane reported profits amounting to €239 million (£206 million) for the fiscal year ending on March 31.
Trading in the shares of L'Occitane International was temporarily halted on the Hong Kong Stock Exchange in response to a report from a reliable source, which disclosed that Mr. Geiger was engaged in advanced negotiations to privatize the company.
According to the business news source, the potential deal could confer a valuation on the company around $6.5 billion (£5.1 billion), or potentially as high as HK$35 ($4.47 or £3.53) per a share.
Nonetheless, L'Occitane responded to these assertions through a filing with the exchange, asserting that the claims of such an elevated buyout price were “unfounded and unsubstantiated.” Should a deal materialize, the prospective offer price would not fall below HK$26 per share.
L'Occitane Groupe, the investment holding company under Mr. Geiger's control, presently possesses ownership of over 70% of the chain's equity.
Over the past month, the company's shares have demonstrated an increase exceeding 40%.
According to the most recent annual report, the company achieved net sales of €2.13 billion ($2.33 billion; £1.84 billion) on a global scale in the preceding financial year, reflecting a nearly 20% rise compared to the previous year.
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The company has notably emphasized its dedication to recycling and sustainability initiatives. However, it faced criticism in April of the preceding year for reversing its decision to close its Russian stores and websites. The rationale for this reversal was attributed to the “considerable human suffering and escalating military actions in Ukraine.”
The preceding week had seen L'Occitane declare to the public broadcaster that it had chosen to keep its stores operational in order to shield its staff from potential “reprisals.” This decision attracted censure from some customers, leading to calls for a boycott of the brand.
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