L'Occitane raises $708 million in Hong Kong IPO

L'Occitane International, the cosmetics and skincare producer and retailer, has raised $708 million from the first Hong Kong initial public offering by a French company after pricing its shares at the top of the indicated range.

The institutional offering was "very significantly oversubscribed" by investors from both Asia and the West, while the retail tranche was about 159 times covered, sources said. The latter led to a clawback that increased the size of the retail tranche to 50% of the deal from the initial 10%.

The popularity of the deal gives some relief to the market, which has been weary of new listings since the beginning of the year. It also offers further evidence that the Hong Kong exchange's efforts to attract companies from outside of Greater China is starting to pay off.  

Executives of the Hong Kong exchange have been touring the globe in recent years to attract a more geographically diverse range of listing candidates -- a job made easier by the recent debt crisis in Europe and the slower recovery in the US, which are diverting capital towards Asia. A European brand that is sought after in Asia, L'Occitane is also benefitting from this trend.

The company sold 364 million shares, or 25% of its enlarged share capital, at HK$15.08 apiece, which equals the top end of a range that started at HK$12.88. Half of the shares were new, while the remainder were sold by parent L'Occitane Groupe, which plans to use the proceeds to repay debt.