L'Occitane International S.A. Announces Offer from Controlling Shareholder to Take Company Private
- Offer price of
HK$34 .00 in cash per share is final and represents approximately 60.83% premium to undisturbed 60-trading day average closing price ofHK$21.14 per share. - €1.7 billion take-private transaction values 100% of
L'Occitane International S.A. at €6.0 billion on an equity value basis. - Proposed privatisation unlocks immediate value for minority shareholders and aims to provide greater flexibility in making longer-term business decisions.
- Shareholders representing 25.79% of the Offer Shares held by Disinterested Shareholders have already committed to tender their shares, and an additional 12.17% have committed to recommend the offer or provided support letters.
Offeror is ultimately controlled by
Offeror has offered a purchase price of
Offeror intends to finance the consideration through a combination of external debt facilities provided by Crédit
In response, the Board has established an Independent Board Committee (the "IBC") comprised solely of dedicated independent non-executive directors to evaluate the Offer and make a recommendation to minority shareholders as to whether the Offer is fair and reasonable and as to acceptance.
Flexibility to invest in longer-term growth initiatives
A combination of industry dynamics and pressures of operating as a listed company underlies the rationale for the transaction.
Offeror believes that, in order to maintain and invigorate the respective market shares of the Company's brands in an increasingly competitive environment, significant further investment in marketing, store refurbishment, IT infrastructure and attracting talent are of vital importance. These investments would entail incurring more expenses in order to lay the foundation for longer-term growth.
The Offer provides greater flexibility to the Company, as a privately-operated business, to pursue strategic investments and more efficiently implement strategies, free from the pressures of the capital markets' expectations, regulatory costs and disclosure obligations, share price fluctuations, and sensitivity to short-term market and investor sentiment. This flexibility is particularly important because competition in the global skincare and cosmetics industry continues to intensify with the entry of new international and local brands.
Privatising the Company would better address these challenges by enabling the Company to more efficiently and effectively implement strategies that are vital for longer-term sustainable growth.
Unlocking shareholder value at a compelling premium
For minority shareholders, this transaction provides an attractive opportunity to monetise their investments at a premium over market price. The offer price exceeds the all-time high closing price of
- A premium of approximately 30.77% over the undisturbed closing price of
HK$26.00 per share as quoted on theHong Kong Stock Exchange on5 February 2024 , the last trading day prior to the leak in the press around the existence of discussions between Offeror and certain third parties to take the Company private (the "Leak Date"); - a premium of approximately 49.91% and 60.83% over the undisturbed average closing price of approximately
HK$22.68 per share andHK$21.14 per share for the 30 and 60 consecutive trading days up to the last trading day prior to the Leak Date, respectively.
In addition to a compelling valuation, the Offer would allow shareholders to realise their investment in the Company for cash amidst an uncertain market climate marked by geopolitical factors and uncertain sentiment in the broader equity markets, among others.
The Offer is particularly compelling in light of the prolonged low trading liquidity of the Company's shares, which makes it challenging for minority shareholders and vested option holders to sell a substantial amount of shares without adversely affecting the share price.
Additionally, appropriate arrangements have been made for holders of options and free shares of the Company to enable all holders interested in the Company's securities to realise their investment in the Company for cash.
In sum, Offeror believes that a take-private transaction in its current form allows shareholders to derive maximum benefit and avoid exposure to uncertain market conditions.
Intention to retain employees, pursue long-term sustainable growth
For the Company's employees and business partners, the transaction would provide the Company with greater flexibility in making longer-term focused business decisions and pursuing long-term sustainable growth. Offeror has stated its intention to continue operating the Company's business and retain employees across all geographies, other than the changes that would occur in the ordinary course of business.
Terms and timing of the Offer
The Offer is subject to a minimum 90% acceptance threshold by shareholders other than Offeror or its concert parties (the "Disinterested Shareholders").
Offeror has received Irrevocable Undertakings from existing Disinterested Shareholders representing in total approximately 25.79% of the Offer Shares held by Disinterested Shareholders to accept the offer. In addition, Disinterested Shareholders representing approximately 12.17% of the Offer Shares held by Disinterested Shareholders have committed to recommend the offer or provided Non-binding Letters of Support.
Offeror intends to conduct a squeeze-out of shares not tendered to the Offer, if it acquires not less than 90% of
The timing of the Offer will commence upon publication of the Composite Document, which will be published at a later date.
Additional information about the Offer, as well as appropriate arrangements for holders of options and free shares of the Company, can be found in the 3.5 announcement published on the website of the
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As at the date of this press release, the executive directors of
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SOURCE L’Occitane International S.A.