Hong Kong-listed L'Occitane International's chairman and controlling shareholder, Reinold Geiger, will take the skin-care firm private, giving it an equity value of 6 billion euros ($6.4 billion), the company said.
The deal will value the shares Geiger does not already own at a maximum of HK$13.91 billion ($1.78 billion), L'Occitane said in a filing to the Hong Kong Stock Exchange late on Monday.
Shares of L'Occitane jumped as much as 12.9% to HK$33.30, their highest since January 2022, when the company resumed trading on Tuesday.
The deal comes as a number of Hong Kong-listed companies, fearing their shares are undervalued, explore take-private options in a volatile stock market chilled by China's economic slowdown, a lack of strong stimulus policies and geopolitical tensions.
As part of the deal, Austrian billionaire Geiger's investment holding company, L'Occitane Groupe, in Luxembourg will pay HK$34 for each share not already owned, representing a 15.3% premium to the stock's last close of HK$29.50 on April 8.
The offer price represents an approximate 60.83% premium to L'Occitane's 60-trading day average closing price of HK$21.14 per share, the holding company said in a separate statement on Monday.
L'Occitane Groupe said the deal would allow its shareholders to cash out due to an uncertain market climate.
The offer was also attractive due to low trading liquidity of the company's shares, it said.
Geiger-controlled L'Occitane Groupe owned 72.39% of the cosmetics company at March-end.
Geiger has secured irrevocable undertakings from shareholders that own about 25.79% of the company to accept his offer, L'Occitane Groupe said.
The investment holding firm does not intend to increase the offer price for the deal, which comes a few months after Geiger shelved a buyout attempt for the company.
Geiger plans to finance a part of the deal using external debt facilities provided by Crédit Agricole Corporate and Investment Bank, with additional financing from Blackstone Inc. and Goldman Sachs Asset Management, L'Occitane said.
Blackstone and Goldman Sachs Asset Management would provide 1.55 billion euros in financing to support the transaction, a source told Reuters on Monday.
L'Occitane International's shares were halted on April 9.
J.P. Morgan will be the financial adviser for L'Occitane Groupe.
Geiger had decided against a deal to take the company private last September, causing its share price to drop.
The company said in August if a deal were to go through, the potential offer price would be no less than HK$26.00 per share.
L'Occitane was listed in Hong Kong in 2010 and was one of the first Western companies to sell its primary shares in the Asian financial hub at the time.
The L'Occitane brand started as a local essential oil business in France's Provence and now has products including soap, creams and fragrances.
L'Occitane Groupe, headquartered in Luxembourg, owns 8 brands with more than 3,000 retail locations and 1,300 own stores in 90 countries, its website shows. - Reuters
