Premium of 61%! L'Occitane announces privatization, ending its 14-year history of listing on the Hong Kong Stock Exchange

Chairman of L'Occitane, Reinold Geiger, announced plans to privatize the skincare brand and delist it from the Hong Kong market. If the acquisition is successful, L'Occitane will end its 14-year "listing history" in Hong Kong.

In a statement on April 29th, Geiger proposed to acquire the remaining L'Occitane shares he does not already own at a price of HKD 34 per share, which is 61% higher than the average price 60 days before his public offer. The total value of this transaction is approximately EUR 6 billion (about USD 6.4 billion) and has received support from several shareholders.

Regarding the main reasons for this privatization, L'Occitane stated that in the increasingly competitive global skincare and cosmetics industry, the current management team hopes to advance the company's long-term strategy more flexibly, free from the constraints of short-term interests in the public market, in order to better achieve the brand's global expansion and market deepening.

Exchange filings show that Geiger already controls over 70% of the company through a tool. It is understood that at least 90% of shareholders without conflicts of interest (i.e., those not controlled by Geiger through his investment tools) need to support the privatization for it to proceed.

Currently, two investment firms (ACATIS Investment and Global Alpha Capital Management) collectively hold 28.69% of L'Occitane shares. They have explicitly stated their support for Geiger's privatization plan and made irrevocable commitments. In addition, several other shareholders have also agreed to participate in this share purchase.

Geiger plans to use financing provided by several large financial institutions to acquire the remaining shares of L'Occitane, including financing from Blackstone Group's Tactical Opportunities Fund and Goldman Sachs' Asset Management division, as well as external debt provided by Crédit Agricole.

L'Occitane has been suspended from trading since April 9th, pending the announcement of the upcoming acquisition. The closing price on the day before the suspension was HKD 29.50 per share, with a market value of approximately USD 5.6 billion. L'Occitane's stock is expected to resume trading on April 30th.

Public information shows that L'Occitane was founded in 1976 by Frenchman Olivier Baussan in Provence, France. He initially produced essential oils by distilling local plants (such as lavender) and sold these products in the local market. Geiger became a minority shareholder in 1994 and later, dissatisfied with the company's performance, decided to personally intervene in the management to protect his investment.

Under Geiger's leadership, L'Occitane conducted its initial public offering in Hong Kong in 2010 and quickly expanded to 90 countries worldwide, with 8 brands and approximately 3,000 sales points. The growth in the Americas region has been particularly rapid.

At the time of writing, L'Occitane opened nearly 13% higher