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Luxembourg-based L’Occitane facing buyout by chairman

Skin-care company’s majority owner seeks to take company private in plan valuing company at €6B

Reinold Geiger, the billionaire owner of Luxembourg-based L’Occitane International SA, wants to take the skin-care company private in a move that could end its 14-year run on the Hong Kong stock exchange.

Geiger is offering HK$34 a share for the L’Occitane shares he doesn’t already own, according to a statement on Monday, which confirmed an earlier report by Bloomberg News. This represents a premium of 61% to the 60-day undisturbed share price of the luxury retailer of French-themed body, face, hair, fragrance and home products.

The deal values L’Occitane at €6 billion ($6.4 billion) on an equity basis and has already received backing from several shareholders.

The Austrian billionaire and chairman of L’Occitane, who became a shareholder about 30 years ago, will fund the buyout with financing from Blackstone Inc.’s tactical opportunities fund and Goldman Sachs Group Inc.’s asset management arm. External debt will also be provided by Credit Agricole Corporate and Investment Bank.

L’Occitane owner said to mull buyout of €3.7bn firm

Global deal making in the consumer industry has risen 18% this year to $400 billion, according to data compiled by Bloomberg.

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. Geiger became a minority shareholder in 1994, but has said the company’s poor performance prompted him to start working there to safeguard his investment.

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. Its fastest growing region is the Americas.

Geiger already controls more than 70% of the company through a vehicle, exchange filings show. ACATIS Investment and Global Alpha Capital Management Ltd., which between them hold 28.69%, have given irrevocable support for the deal. Several other shareholders have also agreed to participate in the tender. At least 90% of disinterested shareholders need to support the take-private for it to go ahead.

Greater Flexibility

L’Occitane, which is headquartered in Luxembourg and Geneva, said delisting will allow the current management team greater flexibility to invest in long-term sustainable growth initiatives and pursue strategic investments. The company said that greater flexibility, free of the pressures of capital markets’ expectations, is particularly important now given the intensifying competition in the global skincare and cosmetics industry.