French cosmetics maker's majority stakeholder makes $3.6-billion buyout offer

30 June 2008

French plants extract cosmetics maker Clarins SA, which is speculated to be of takeover interest, has informed the French stock market regulator that its majority stakeholder, the Courtin-Clarins family, has made a $3.6-billion buyout offer to minority shareholders in order to take it private.

The buyout offer effectively quashes mounting soeculation that seemed to have acquired credence after the death of its founder Jacques Courtin-Clarins in March 2007, that it could be acquired larger rivals L'Oreal, PPR, Estee Lauder, LVMH and Procter and Gamble as possible acquirers.

The company said in a statement, "In view of persistent rumors surrounding Clarins stock, we want to say once again that the Courtin-Clarins family, a majority shareholder, does not plan to give up control of the group."

The Courtin-Clarins brothers Christian and Oliver, control 65 per cent of the capital of Clarins and 78 per cent of its voting rights. It has offered 55.50 euros per share to all minority shareholders representing a premium of around 27 per cent  to the last traded share price, which it plans to fund partly by raising debt.

Clarins stock has lost market value as its current trading price is at a three-year low, rising each time speculation emerged that the company might be sold, even though it has increased investment in new skin creams introduced last year to boost sales despite growth slow down in its main European market, and will now also make scents, cosmetics and accessories under crystal maker Swarovski's brand, introduce new Porsche Design, and David Yurman fragrances in the second half of this year.

 It said further investment in new products would erode its profitability, even as it has been facing criticism for adequate lacking scale for its expansion.