(News Bulletin 247) – Suspended from trading on Monday, L’Occitane plunged on the Hong Kong Stock Exchange after its majority shareholder finally abandoned the idea of delisting the cosmetics group.
Shares of French cosmetics brand L’Occitane plunged nearly 30% on Tuesday in Hong Kong, where the company is listed, after its chairman called off talks to buy shares in the company.
The company, known for its skincare products and fragrances, raised more than $700 million when it went public in Hong Kong in 2010, buoyed by optimism about China’s booming consumer market.
Bloomberg News said in July that its chairman Reinold Geiger was exploring options for a public bid to delist the Hong Kong Stock Exchange, buying back shares in the company he does not yet own.
Since then, the company’s shares have risen about 40%, before trading was suspended on Monday “pending the publication of an announcement in accordance with the Mergers and Acquisitions Code”, according to a filing in Sotck exchange.
Massive stock sales
However, investors sold plenty of stocks on Tuesday after trading resumed after billionaire Geiger halted trading. “The company’s board of directors announces that it has been informed by the majority shareholder on September 3, 2023 of its decision not to proceed with a possible transaction,” he said in a statement Monday evening, which does not provided no details.
L’Occitane fell 29% to HK$19.70 – the lowest level since July – before recovering slightly and ending down 17.27% at HK$23.00.
The company, which is headquartered in Luxembourg and Geneva, said last month it was considering an offer for the securities it does not own at at least HK$26 ($3.30) per share, but she had “not received any firm offers” at the time.
The brand’s introduction in Hong Kong came at a time when Western brands were looking for new ways to tap into the growing Chinese consumer market.
The group’s portfolio includes L’Occitane en Provence, the French brand Melvita, the Korean line Erborian and Elemis, a British brand. The ranges range from face and body products to perfumes and make-up.
(With AFP)
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