Blackstone is nearing a deal to buyout L’Occitane International private, as per people familiar with the matter. This Blackstone and L’Occitane private deal, potentially ending the global cosmetics and skincare giant’s 14-year run on Hong Kong’s stock exchange. The $5.55-billion French cosmetics company halted trading in its Hong Kong shares earlier in the day ahead of a likely announcement spelling out details on any takeover plans.
The private equity firm, Blackstone may team up with L’Occitane’s billionaire owner Reinold Geiger for the buyout, as per a person familiar with the matter. A formal announcement of Blackstone buyout of L’Occitane beauty could be in the coming days, the people said.
L’Occitane trading suspended
Trading of L’Occitane was suspended before the Hong Kong stock market opened on April 9, pending an announcement related to takeover codes. While deliberations are at an advanced stage, they could still be delayed or even fall apart, the people said.
Blackstone may also be a minority shareholder in any buyout of L’Occitane, one of the people said.
A representative for Blackstone declined to comment, while L’Occitane did not immediately respond to a request for comment.
The private equity firm has been considering a bid for L’Occitane and has conducted preliminary due diligence, as per a report in February.
L’Occitane market value
Austrian billionaire Geiger, the controlling shareholder of L’Occitane, had decided against a deal to take the company private last September, triggering a drag in the shares.
The company has a market value of about HK$43.6 billion (S$7.5 billion). A vehicle ultimately controlled by Mr. Geiger, who is L’Occitane chairman, owns more than 70% of the company, exchange filings show.
L’Occitane journey
L’Occitane was founded in 1976 by Frenchman Olivier Baussan, who started out making essential oils from plants like lavender in the Provence countryside and selling them at local markets.
Mr. Geiger became a minority shareholder in 1994, but has said the company’s poor performance prompted him to start working there in a bid to safeguard his investment.
He expanded L’Occitane globally, saying he decided to move into Asia after being impressed by the region’s work ethic. Initially, the strategy went so badly that his auditor warned the poor results could put the whole company in jeopardy.
The retailer was listed in Hong Kong in a 2010 initial public offering and now has eight brands and some 3,000 locations in 90 countries. Yet it earns only about one-third of its revenue in Asia, while the Americas is its fastest growing region.
Blackstone has been exploring a deal with L’Occitane, but the structure of the deal is not immediately clear, as per a person with knowledge of the matter, requesting anonymity as the information was private.
Bloomberg reported in February that Blackstone was considering a bid for L’Occitane, sending the French firm’s shares surging to their highest levels in two years.
