L'Occitane: Hold Steady Amid Buyout Buzz

We recommend that shareholders hold their positions in L’Occitane in light of an unconfirmed Bloomberg report about buyout interest from Blackstone. Although the potential offer's terms are not disclosed, we believe any bid needs to approximate our fair value estimate of HKD 37 per share to entice shareholder acceptance. Should any such proposal fall substantially below this threshold, we think that shareholders would benefit more from L'Occitane's pursuit of its medium-term goals. These goals encompass the worldwide expansion of brands such as Elemis, Sol de Janeiro, and Grown Alchemist, in addition to efforts aimed at improving profit margins.