Billionaire Reinold Geiger Proposes to Take L'Occitane Private, Ending 14-Year Run on Hong Kong Stock Exchange
Billionaire Reinold Geiger, the owner of L'Occitane International SA, has announced plans to take the skincare company private, which would mark the conclusion of its 14-year presence on the Hong Kong stock exchange. Geiger has put forward a proposed offer of HK$34 per share for the L'Occitane shares that he doesn't already possess, representing a substantial 61% premium over the company's 60-day undisturbed share price. This deal places the valuation of L'Occitane at €6 billion ($6.4 billion) on an equity basis, presenting a significant premium for its current shareholders.
Key Takeaways
- Reinold Geiger, the owner of L'Occitane, is pursuing plans to privatize the company, bringing an end to its 14-year tenure on the Hong Kong stock exchange.
- Geiger's offer of HK$34 per share for the L'Occitane shares not under his ownership stands as a substantial 61% premium over the company's 60-day undisturbed share price.
- The valuation of L'Occitane at €6 billion ($6.4 billion) in the deal signifies a noteworthy premium over recent share prices, indicating potential value for the company's shareholders.
- Geiger, who currently holds a portion of L'Occitane shares, is aiming to secure complete ownership of the company.
Analysis
Reinold Geiger's decision to take L'Occitane private may arise from various motives, which could include the pursuit of greater control, reduced regulatory burden, and a more adaptable strategic approach. While shareholders are poised to benefit from a substantial premium, the delisting could have implications for Hong Kong's standing as a global financial hub. Additionally, the acquisition involving banks and financial institutions might result in heightened business opportunities for them. The repercussions may extend to L'Occitane's competitors, who may perceive an opportunity to gain market share amid this transition. Looking ahead, it will be intriguing to observe if other companies consider following suit and delisting from the Hong Kong stock exchange, influenced by this development.
Did You Know?
- Taking a Company Private: This process entails acquiring all the publicly held shares of a company, removing it from the public stock exchange, and converting it into a private entity. Reinold Geiger, as the majority shareholder, aims to take L'Occitane private and delist it from the Hong Kong stock exchange.
- 60-Day Undisturbed Share Price: The 60-day undisturbed share price denotes the average stock price of a company over the past 60 days, excluding any abnormal price movements due to significant news or events. In this case, Geiger's HK$34 per share offer signifies a 61% premium over L'Occitane's 60-day undisturbed share price.
- Equity Basis: Equity basis refers to the value of a company's shares or stocks after deducting liabilities, also known as shareholders' equity. The €6 billion ($6.4 billion) valuation for L'Occitane is rooted in its equity basis, representing the value of the company's assets subsequent to accounting for its outstanding debts and obligations.