Luxembourg-based JAB, a global investment firm focused on long-term investing in premium brands in consumer goods and services, has announced that an affiliate will shortly commence a tender offer pursuant to which JAB Cosmetics B.V. would acquire up to 150 million additional shares of Coty Inc. Class A common stock at a price of $11.65 per share in cash. The offer is subject to, among other things, approval of Coty’s independent directors.
 
JAB has been an investor in the Coty for almost three decades and says they expect to remain so. According to JAB’s letter to the Coty board: “We believe that the Company has the potential to address its challenges and prosper over the long-term, and that the Company’s recent management changes are an important first step in addressing the Company’s recent performance.
 
“We understand that not all investors may share our long-term approach and we expect that shareholders will value the opportunity to obtain a significant premium for their shares in the Offer, even taking into account the recent strong increase in the Company’s share price. At the same time, we appreciate that some shareholders will want to participate in the Company’s long-term potential value by retaining some or all of their shares in the Company after the Offer.”
 
The offer is subject to certain conditions
 
According to JAB’s offer letter, “If all 150 million shares of Common Stock are purchased in the offer, JAB would own, together with their current shareholdings, an aggregate of 450,908,041 shares of Common Stock, representing approximately 60% of the issued and outstanding shares of Common Stock. If 50 million shares of common stock are purchased in the offer, which represents the number of shares of Common Stock necessary to satisfy the Minimum Tender Condition, we would own an aggregate of 350,908,041 shares of Common Stock, representing approximately 47% of the issued and outstanding shares of Common Stock.”
 
Coty’s CEO, Camillo Pane, recently resigned from the New York company, which is facing supply chain and revenue issues. Pierre Laubies, who last ran JDE, a beverage company, took over in November. He also has a seat on the board.
 
On February 8, Coty announced financial results for the second quarter of fiscal year 2019, ended December 31, 2018. Net revenues of $2,511.2 million decreased 4.8%, with a like-for-like revenue growth of 0.7%. While Luxury beauty was up, Consumer Beauty decreased sharply.
 
JAB has investments in Dr. Pepper, Krispy Kreme Doughnuts, the Pret a Manger and Panera Bread chains and Reckitt Benckiser, a consumer goods maker.
 
 
 
PHOTO: CoverGirl’s Leaping Bunny collection, launched late Fall 2018.