L'Oréal offers $840 million for Chinese skincare company
Paris-based L'Oréal announced its move for the Hong Kong-listed maker of facial masks on Thursday and said that its HK$6.30-per-share offer is supported by Magic's board of directors.
"Six key shareholders, representing 62.3 percent of the company's equity, are already committed to supporting L'Oréal's proposal," the French company said in a statement, adding that the deal would be subject to approval from the Chinese Ministry of Commerce.
The offer represents a 25 percent premium to Magic's last closing price before trading in the shares was suspended on August 12 to prevent speculation.
The deal is expected to be financed through L'Oréal's internal resources and a 650 million euro credit facility from BNP Paribas, the two companies said in a joint statement. On completion, Magic Holdings shares are expected to be withdrawn from the Hong Kong stock exchange.
China is L'Oréal's third-largest market behind the United States and France.
L'Oréal, the products of which include Garnier shampoo and Yves Saint Laurent perfume, posted a 5.2 percent rise in quarterly sales last month, boosted by higher growth in newer markets such as the Asia-Pacific region.
The French company said that Magic achieved sales worth 150 million euros in 2012, up 29 percent on the previous year.
$1 = 7.7549 Hong Kong dollars
© Thomson Reuters 2013 All rights reserved.