Shelved L’Occitane buyout is no win for Hong Kong
A woman walks past a L'Occitane advertisement in Hong Kong April 19, 2010. Cosmetics retailer L'Occitane International S.A. plans to raise up to $708 million in a Hong Kong initial public offering, a source close to the deal said on Sunday night. L'Occitane, which manufactures products including almond and olive-based creams would be the Acquire Licensing Rights
MUMBAI, Sept 5 (Reuters Breakingviews) - Some ideas are hard to put back in a box. Reinold Geiger has given up on his tentative plan to buy out the minority of shares he doesn’t already own of L’Occitane (0973.HK), a move that would have delisted the European skincare group from Hong Kong in the Asian hub’s largest take-private. The decision leaves the enterprise where it started: unappreciated, trading at a lower multiple of EBITDA than European rivals like L’Oreal (OREP.PA) and Beiersdorf (BEIG.DE), and in a group of global names including luxury powerhouse Prada , and Samsonite (1910.HK) that are officially or otherwise mulling a full or partial exit from Hong Kong.
The Austrian billionaire didn’t explain why he shelved the idea, which was probably a prelude to a relisting in Europe – mostly likely France. The appeal of such a move is unlikely to have diminished as global investors turn cold on both Hong Kong and China stocks, possibly for the long term. At the HK$35-per-share offer previously reported by Bloomberg, Geiger would have needed $1.8 billion to buy the roughly 27% he didn’t own as of March. With his decision sending the stock crashing 30%, the entire company is now worth $3.9 billion. Investors are disappointed, but some kind of exit may still be on the table. (By Una Galani)
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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Editing by Una Galani and Thomas Shum
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