French cosmetics group L’Occitane said yesterday it could raise as much as US$812 million in a Hong Kong share offering.
The company said it would offer 364.12 million shares for between HK$12.88 and HK$15.08 (US$1.65 and US$1.94) per share from today, with the price to be fixed at the end of this month.
An over-allotment option would let the company issue an additional 54.61 million shares, it said.
The company said it expected to net about US$315.6 million after expenses, assuming a mid-range share price of HK$13.98. That figure did not include the over-allotment option.
L’Occitane’s stock would start trading on May 7, the company said.
It would be the first French company to list on Hong Kong’s bourse, which has been eager to attract non-Chinese businesses amid stiff competition from London and Shanghai.
“We believe [the Asia-Pacific region] will be a key growth driver in the coming years and that is one of the reasons we have decided to list our company in Hong Kong,” managing director Andre Hoffmann said in a videoconference yesterday.
About 65 percent of the initial public offering proceeds will be earmarked for expanding the brand’s presence in high-growth emerging markets such as China, Brazil, Russia, India and Mexico, the company said.
The company would also open new stores in established markets including Japan, Germany and the UK, it said.
The remaining IPO proceeds would be used to update French manufacturing plants and develop L’Occitane’s Internet sales business, it said.
The company, which has about 1,500 stores worldwide, said Japan, Hong Kong and Taiwan alone accounted for 35 percent of its total sales in the nine-month period ending December.
L’Occitane said its total sales last year were 537.33 million euros (US$719.19 million) with a 58.38 million euro profit.
L’Occitane has 46 stores in China and plans to boost that number.
Company executives declined to say how many new Chinese locations would be opened. Other international cosmetics brands, however, have more than 100 locations in China, a rough guide for L’Occitane’s plans, they said.
“China is expected to be the fastest-growing cosmetics market,” head of strategy Olivier Ceccarelli said yesterday.
“China will continue to be a major revenue driver for our company,” he said.
Chairman Reinold Geiger said the decision to list in Hong Kong was unrelated to criticism that the financial hub’s regulations are more lax than those in other capital centers.
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