L'Occitane Billionaire Owner Plans $7 Billion Buyout to Take Company Private

Reinold Geiger, the billionaire owner of L'Occitane International SA, is planning a $7 billion buyout to take the French skincare company private. Geiger's investment holding company, L'Occitane Groupe SA, is considering an offer to buy the shares he does not already own at HK$33 to HK$34 per share, potentially valuing L'Occitane at around 6.5 billion euros.

Blackstone Inc's tactical opportunities fund and Goldman Sachs Asset Management are expected to provide around 1.6 billion euros in funding for the deal. Trading of L'Occitane shares was suspended in Hong Kong on April 9, pending an announcement related to the takeover. Geiger, who currently controls over 70% of L'Occitane, appears determined to take the company private after its 14-year tenure on the Hong Kong stock exchange.

Why this matters: The potential buyout deal could end L'Occitane's 14-year run on the Hong Kong stock exchange and marks a major development in the company's trajectory. As L'Occitane faces increasing competition in key markets like China, the privatization may provide more flexibility for the company to address challenges and pursue growth strategies.

L'Occitane, founded in 1976 by Frenchman Olivier Baussan, was listed in Hong Kong in a 2010 IPO and now has eight brands and 3,000 locations in 90 countries. However, the company is facing challenges in the Chinese market, where global brands like L'Oreal and Estee Lauder are offering frequent discounts, and domestic brands are gaining popularity.

Geiger had previously decided against a deal to take the company private in September last year but is now reviving the plan. The offer could present an enterprise value of approximately €6.5 billion ($7 billion) for L'Occitane. "The possible offer could value L'Occitane at around 6.5 billion euros," according to sources familiar with the matter.

Key Takeaways

• Billionaire Reinold Geiger plans $7B buyout to take L'Occitane private.
• Blackstone and Goldman Sachs to provide €1.6B in funding for the deal.
• Privatization may give L'Occitane more flexibility to address challenges.
• L'Occitane faces competition in China from global and domestic brands.
• Potential deal values L'Occitane at around €6.5B ($7B).