The board of directors of L'Occitane International S.A. (SEHK:973) announced that L'Occitane Groupe S.A. (?Offeror?), the controlling shareholder of the Company, has offered to acquire all shares in the Company (other than treasury shares) that Offeror does not already own (?Offer Shares?), with the intention to privatise and delist the Company from the Hong Kong Stock Exchange. The rationale is to allow the current management team, which would remain in place, to continue operations of the Company's business as it is and invest in long-term sustainable growth initiatives as a privately held company. Offeror is ultimately controlled by Reinold Geiger, the Chairman and director of both the Company and Offeror.

Offeror and its concert parties own 72.64% of issued and outstanding shares in the Company. Offeror has offered a purchase price of HKD 34.00 per share in cash (the ?Offer?). Offeror has indicated the offer price is final and will not be increased further.

Offeror intends to finance the consideration through a combination of external debt facilities provided by Crédit Agricole Corporate and Investment Bank (CA-CIB), with additional financing capital provided by funds managed by Blackstone Inc. and its affiliates and Goldman Sachs Asset Management International or its affiliates. In response, the Board has established an Independent Board Committee (the ?IBC?) comprised solely of dedicated independent non-executive directors to evaluate the Offer and make a recommendation to minority shareholders as to whether the Offer is fair and reasonable and as to acceptance. Somerley Capital Limited, as Independent Financial Adviser, has been appointed by the Company, and approved by the IBC, to advise the IBC in connection with the Offer.

The IBC's recommendation will be included in a composite document to be jointly published by Offeror and the Company (?Composite Document?), which will officially commence the Offer. A combination of industry dynamics and pressures of operating as a listed company underlies the rationale for the transaction. Offeror believes that, in order to maintain and invigorate the respective market shares of the Company's brands in an increasingly competitive environment, significant further investment in marketing, store refurbishment, IT infrastructure and attracting talent are of vital importance.

These investments would entail incurring more expenses in order to lay the foundation for longer-term growth. The Offer provides greater flexibility to the Company, as a privately-operated business, to pursue strategic investments and more efficiently implement strategies, free from the pressures of the capital markets' expectations, regulatory costs and disclosure obligations, share price fluctuations, and sensitivity to short-term market and investor sentiment. This flexibility is particularly important because competition in the global skincare and cosmetics industry continues to intensify with the entry of new international and local brands.

Privatising the Company would better address these challenges by enabling the Company to more efficiently and effectively implement strategies that are vital for longer-term sustainable growth. The Offer is subject to a minimum 90% acceptance threshold by shareholders other than Offeror or its concert parties (the ?Disinterested Shareholders?). Offeror intends to conduct a squeeze-out of shares not tendered to the Offer, if it acquires not less than 90% of Offer Shares held by Disinterested Shareholders by 26 August 2024 (or as otherwise extended).