Blackstone (BX.US) is close to reaching a deal to privatize L'Occitane (00973), which could end the 14-year listing of the global cosmetics company on the Hong Kong Stock Exchange.
The Zhitong Finance App learned that according to people familiar with the matter, Blackstone (BX.US) is close to reaching a deal to privatize L'Occitane (00973), which may end the 14-year listing of this global cosmetics company on the Hong Kong Stock Exchange.
One of the sources said the private equity firm may join forces with L'Occitane's controlling shareholder, billionaire Reinold Geiger (Reinold Geiger). According to these people familiar with the matter, the relevant transaction may be announced as soon as possible within the next few days. L'Occitane announced the suspension of trading before the market on Tuesday, pending an announcement regarding the takeover code.
The above sources said that although discussions have entered an advanced stage, they may still be postponed or even broken down. Kuroishi may also become a minority shareholder in this acquisition, one of the sources said. Blackstone representatives declined to comment, and L'Occitane did not immediately respond to requests for comment.
According to foreign media reports in February, Kuroishi has been considering bidding for L'Occitane and has already carried out preliminary due diligence. The company's market capitalization is approximately HK$43.6 billion (US$5.6 billion). Exchange documents show that a company ultimately controlled by L'Occitane chairman Geiger owns more than 70% of the company's shares.
L'Occitane was founded by Frenchman Olivier Baussan (Olivier Baussan) in 1976. He initially extracted essential oils from plants such as lavender in the Provence countryside and sold them in the local market. In 1994, Geiger became a minority shareholder of the company, but he said that the company's poor performance prompted him to start working for the company to protect the results of his investments.
He expanded L'Occitane globally and said he decided to enter Asia after being impressed by the work ethic of the Asian region. At first, the strategy was difficult to progress, and the auditor warned that poor performance could jeopardize the entire company. L'Occitane's initial public offering (IPO) in Hong Kong in 2010, currently has 8 brands and approximately 3,000 branches in 90 countries around the world. However, it accounts for only about one-third of its revenue in Asia, and America is the region where it is growing the fastest.
Currently, L'Occitane is facing increasingly severe market challenges in China, and global brands such as L'Oréal and Estée Lauder are facing challenges in China. Although China was the biggest selling market for the brand in fiscal year 2021 and 2022, it was surpassed by the US last year. The group's profit has also declined in recent years. In the fiscal year ending March 2023, L'Occitane's profit fell 51% year over year, while in the six months ending September, profit fell 38%.