Engelhard makes offer to buy stake in Coletica

- Last updated on GMT

Related tags: Share, Shareholder, Stock market

French cosmetics ingredients producer Coletica has confirmed that
it has received an offer from Engelhard Corporation to buy a
majority stake in its share capital, in a move that will give the
company a much-needed cash injection, reports Simon Pitman.

Coletica​ said that it had received an offer to buy 77.87 per of its issued share capital from the US raw materials company on 7 February. Currently those shares are held by French fashion house Lacoste, together with significant stakes owned by two large scale private investor. Some shares are also indirectly owned by the Bioetica company.

Engelhard​ has negotiated a shareholders agreement with the majority group, which comprises the interested parties. Its offer applies to a block of 1,358,730 shares that have been valued at €37.10 - valuing the total offer at €50.4 million.

The offer to buy the shares is irrevocable and the only conditions that apply is that it concerns Coletica's performance up to 31 December 2004 and the execution of the final documents if the offer is accepted by the shareholders.

Engelhard has given the shareholder group until the end of March to consider its offer, which, if accepted, will be filed as a standing offer in accordance with market regulations.

Coletica, which is listed on the Eurolist for the Euronext Paris, specialises in active compounds and related technology for the cosmetics and beauty industry. It deals with a host of upmarket cosmetic companies, including names such as Coty, Chanel, Estée Lauder, Henkel, l'Oréal and LVMH.

Traditionally it has provided these companies with R&D facilities and know-how to provide definition and implementation of concepts for the development of new products. Approximately half of its business operations - which cover the Americas, Asia and Europe - are governed by active compounds, with the other half revolving around encapsulation technologies.

In recent years Coletica's financial performance has been shakey, with full year results for 2003 showing turnover down from €20.8 million in 2002 to €19.4 million.

However, a concerted effort to improve the company's commercial structure, combined with improvements to its commercial offer, paid great dividends for the first six months of the financial year 2004, with turnover up 33 per cent to €12.7 million compared to the corresponding period.

The improvement in margins has in turn put made the company a more attractive investment proposition, putting it in a strong position to raise the necessary capital to expand its operation further.

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