JAB gets the go-ahead for Coty tender offer

By

Robin Driver

Published
Apr 30, 2019

New York-based cosmetics conglomerate Coty has announced that all conditions for the tender offer made by Cottage Holdco B.V., an affiliate of JAB Holding Company, were satisfied or waived on April 26, giving the green light for a $1.75 billion deal that will see the investment firm become Coty’s largest shareholder.

 
First made on February 13, the tender offer will see JAB acquire 150 million shares in Coty at $11.65 a share, a transaction that will take its current 40% stake in the international beauty company up to around 60%.
 
Following a positive response from the special committee set up by Coty to evaluate the deal in mid-March, the offer’s expiration date was pushed back repeatedly in April as JAB waited on a final regulatory approval in Russia.

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On Friday, however, Coty was able to confirm that “as of April 26, 2019, all required regulatory approvals, clearances or applicable waiting periods have been received or expired in all relevant jurisdictions,” which, aside from Russia, include Brazil, Canada, China, the European Union, Mexico, South Africa, Turkey and Ukraine.
 
With a portfolio of brands that includes Covergirl, Max Factor, Sally Hansen and Rimmel, Coty’s products are currently sold in more than 150 countries around the world. However, the beauty group, which has only posted one quarterly net profit in the last two years, has been struggling to keep up with the changes taking place in the cosmetics industry.
 
Coty reported a 4.8% decline in revenue to $2.51 billion in the second quarter ended December 31, 2018, while its net loss totaled $960.6 million, or $1.28 per share.