Shares of French cosmetics company L’Occitane International SA (HK:0973) surged to a new all-time high of HK$30 today following reports that American private equity firm Blackstone (NYSE:BX) is interested in a buyout. L’Occitane shares spiked over 15% in early trade this morning. However, shares reversed some gains and were up 9.2% at the time of writing.
L’Occitane is one of the leading players in the skincare and well-being products markets. 0973 shares have gained 49% in the past year.
Blackstone is one of the largest private equity firms in the U.S., with diversified investment bases. Blackstone also engages in real estate, hedge fund solutions, credit, and insurance services.
About Blackstone and L’Occitane’s Deal
As per a Bloomberg report, Blackstone has been conducting preliminary due diligence ahead of a potential formal bid. The report also claims that Blackstone could team up with L’Occitane’s billionaire chairman Reinold Geiger for a full buyout of the luxury skincare company.
Meanwhile, L’Occitane could draw interest from other buyers. The talks between Blackstone and L’Occitane are in very early stages and might end without a formal bid.
Geiger owns a majority stake of over 70% in L’Occitane via his investment vehicle, L’Occitane Groupe SA. Last year, Geiger planned to acquire 100% of L’Occitane, with the intention of relisting it in Europe at higher valuations. However, he dismissed the idea soon, which led to a massive share price loss. Geiger’s stance might be different this time, as he is reportedly involved in the buyout talks.
Is L’Occitane a Good Stock to Buy?
With three unanimous Buys, 0973 stock commands a Strong Buy consensus rating on TipRanks. The L’Occitane International SA share price target of HK$27.53 implies 6.7% upside potential from current levels.
