The Estée Lauder Companies Executive Chairman William Lauder and President and CEO Fabrizio Freda have flatly rejected media speculation that the company is involved in a potential sale or merger.
Last Sunday, 27 August, UK media The Times reported “speculation” that the US beauty giant was working with Goldman Sachs and Evercore bankers on a sale, following a takeover approach worth more than U$$40 billion. The report claimed that The Estée Lauder Companies was examining “strategic options” following interest from French rival L’Oréal.
The detailed report said that L’Oréal was “rumoured” to have made an indicative approach of US$122.80 a share, valuing Lauder at US$45 billion – four times sales and 21.5 times EBITDA.
The Times said that Evercore had provided a ‘fairness opinion’, valuing The Estée Lauder Companies at US$124 a share. The company’s stock closed Friday 1 September at a 52-week high of US$107.93. The company has a market capitalisation of US$39.7 billion and a PE ratio of 32.22
“The Lauder family and our Board place great value in remaining independent. Our company is strong and we have excellent momentum going forward.” – William Lauder and Fabrizio Freda
However, in an internal memo to management obtained by The Moodie Davitt Report, William Lauder and Fabrizio Freda flatly dismissed the report.
In a joint statement, they said: “We are aware of recent press that speculates that The Estée Lauder Companies may be in discussions regarding a potential sale or merger. There is no truth to these rumours. The Estée Lauder Companies is not for sale.
“The Lauder family and our Board place great value in remaining independent. Our company is strong and we have excellent momentum going forward. Please cascade this information to your respective teams.”
The Lauder family owns over 40% of all outstanding shares. Critically though, it controls 87% of voting rights.
