May 22, 2019
Oriflame founders make offer to buy out Swedish cosmetics company
May 22, 2019
The founders of Swedish beauty products company Oriflame have made an offer to buy out the shares in the company that they do not already own, valuing the company at 12.9 billion crowns (1.03 billion pounds).
Oriflame's main owner, the af Jochnick family, said it had made a cash offer of 8.89 billion crowns or 227 crowns per share to remaining shareholders, representing a 35% premium to the 168.35 crown closing price for Oriflame's stock on Monday.
Shares in the company, a rival to U.S. group Avon, surged 34 percent in opening deals.
Oriflame's products range from makeup and skin and haircare to accessories and food additives and are sold by direct-selling agents.
The group has reduced its exposure to Russia and other CIS countries in recent years in the face of tough market conditions. It has over the past year also faced a slowdown in activity in its Asia & Turkey business.
The founding family, which controls 31 percent of Oriflame, said the company "needs to undertake a repositioning in key geographies, and that achieving this repositioning has challenges in the public market."
"We have therefore chosen to make an offer for the shares in the company that the family does not already own, in order to enable Oriflame to achieve this repositioning with the benefit of private ownership," the family said.
Oriflame said in a separate statement that independent board members had formed a bid committee, without af Jochnick family board members, that would evaluate the offer and announce its opinion no later than two weeks before the expiry of the acceptance period.
Oriflame's products are sold in around 60 markets under many different brands of which Oriflame is the biggest.
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