L'Occitane International's Shares Surge on Controlling Shareholder's Proposed Buyout Offer

L'Occitane International, a renowned cosmetics retailer, experienced a significant surge in its shares on Monday. This rise was fueled by the optimistic anticipation of an attractive offer from the company's controlling shareholder to acquire the remaining shares.

With the share value peaking at 28.85 Hong Kong dollars (US$3.69), L'Occitane witnessed its highest intraday level since February of the previous year. Furthermore, this surge marks the largest percentage jump in a single day since May.

Late Friday, L'Occitane announced that Reinold Geiger, the chairman of L'Occitane Groupe, who currently holds approximately 73% of L'Occitane International according to Factset, is contemplating a minimum offer of HK$26.00 per share to privatize the company.

In response to this news, Jefferies analysts stated in a note that they believe this offer will establish a price baseline until any further announcements regarding the general offer.

Additionally, the note highlights the possibility of international companies in Hong Kong reassessing their listing status or exploring alternative options due to the diminishing appeal of the original arrangement.

According to the note, "The lower the valuation compared to global peers, the greater the likelihood that major shareholders of these companies will seek alternative options, such as privatization or dual primary listing."

As of now, the stock is being traded at HK$28.00.