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Shares in French beauty brand L'Occitane plunged by a record of almost 30 percent in Hong Kong on Tuesday after its chairman called off talks on taking the firm private.
The luxury retailer, known for its skincare products and fragrances, raised more than $700 million in its Hong Kong initial public offering in 2010, buoyed by optimism over the booming Chinese consumer market.
Bloomberg News reported in July that chairman Reinold Geiger was studying options for taking the brand private, using a holding company that owned more than 70 percent of its shares.
Since then its shares rallied around 40 percent, while trading in them was suspended Monday "pending the publication of an announcement pursuant to the Code on Takeovers and Mergers", according to an exchange filing.
However, investors dumped the firm Tuesday as it resumed trading a day after billionaire Geiger ended deliberations.
"The board of directors of the Company announces that it was informed by the controlling shareholder on 3 September 2023 that it has decided not to proceed with the Possible Transaction," it said in a filing Monday evening, which provided no details.
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Shares dropped 29 percent to as low as HK$19.70 -- the lowest since July -- before recovering slightly but still ending down 17.27 percent at HK$23.00.
The firm, headquartered in Luxembourg and Geneva, said last month it was considering a possible take-private deal with an offer price of no less than HK$26 ($3.30) per share.
The brand's listing in Hong Kong came at a time when western brands were seeking new ways to tap the growing Chinese consumer market.
The group's portfolio includes L'Occitane en Provence, French beauty brand Melvita, Korean skincare line Erborian, and Elemis, a British care product brand.
Source: AFP
