Shelved L’Occitane buyout is no win for Hong Kong
05/09/2023 05:36
(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
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 1913.HK , 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)
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(Editing by Una Galani and Thomas Shum)
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