Europe on the stock market, new promised land for the cosmetics sector?

(BFM Bourse) – The owner of L’Occitane is considering withdrawing the cosmetics group from the Hong Kong Stock Exchange, for a possible return of the company to the financial markets in Europe. Other companies in the sector could also boost the European rating such as Douglas or Coty.

L’Occitane could bid farewell to the Hong Kong Stock Exchange. And it is Reinold Geiger, its president who would be maneuvering to withdraw the French company from the Hong Kong market, according to Bloomberg.

Present in the capital since 1994, the billionaire Reinold Geiger would be in advanced discussions with a view to buying back the shares of the company which he does not yet hold at a unit price of 35 Hong Kong dollars, or 4.40 dollars, affirmed sources familiar with the matter to Bloomberg.

The potential offer of the Austrian businessman would externalize a premium of 37% compared to the last quoted price and 70% compared to the price which prevailed before the disclosure of this information by the press agency. The price offered by Reinold Geiger would even be higher than the historic record of 31.55 Hong Kong dollars reached by the title in December 2021. Pending further developments, L’Occitane shares were suspended from trading on Wednesday.

First listed company in Hong Kong

The proposal thus values ​​L’Occitane at $6.5 billion. It therefore appears to be generous for minority shareholders, given L’Occitane’s stock market performance over one year. The company’s valuation fell by 20% over the period and currently weighs only $4 billion, adds Bloomberg.

For the moment, discussions are ongoing and the final offer could be slightly lower, according to these same sources. But if this information were to be confirmed, Reinold Geiger would withdraw the French company that he introduced 13 years earlier in Hong Kong and not in Paris.

He had then favored Hong Kong to increase the exposure of the group founded in 1976 to the Asian market, its first customer, which then represented 40% of its sales between April and December 2009. L’Occitane thus became the first French company to become listing in Hong Kong.

“The image of L’Occitane in Asia, the significant share of Asia in consolidated sales as well as the strong development prospects of this region explain the choice of the place of Hong Kong”, explained Reinold Geiger to justify his choice. In 2010, the market context in Europe was also different. Stock market Europe was struggling with the Greek debt crisis, which threatened to spread to the whole of the European Union.

Douglas in Frankfurt from 2024?

This potential delisting of L’Occitane does not mark the end of a stock market story between the Manosque-based group and the financial markets. The Austrian businessman would study the possibility of a new listing of Occitane in Europe from next year, according to Reuters. Even Paris, if we rely on the sources cited by Bloomberg.

Formerly shunned, Europe would therefore take its revenge. Other companies in the cosmetics sector could indeed appear on the stock markets of the Old Continent, such as Douglas, the German parent company of the French brand Nocibe. According to Bloomberg, CVC Capital Partners is considering listing the German perfume and cosmetics chain on the stock market.

The private equity firm would thus have mandated Rothschild & Co to prepare for the IPO, which could take place as early as next year in Frankfurt, according to sources familiar with the matter. Last spring, it was the American specialist in perfumes and cosmetics Coty which indicated that it was considering a double listing on the Paris Stock Exchange, the group already having a presence on Wall Street.

“If the company enters a listing process, Coty Inc. will become a dual-listed company on the New York Stock Exchange (NYSE) and the Paris Stock Exchange (PAR), which will strengthen Coty’s presence in Europe and provide a way additional opportunity to reach untapped investors in the market,” the company said in a statement.

This IPO would above all bring in a potential heavyweight in Paris. To give an idea, Coty currently weighs 10 billion dollars in New York, or 9.1 billion euros. It’s almost as much as an Alstom (9.89 billion euros) or even much more than Unibail-Rodamco-Westfield (6.75 million euros)…

Sabrina Sadgui – ©2023 BFM Bourse

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