Shiseido moves ahead with Bare Escentuals acquisition

By Simon Pitman

- Last updated on GMT

Related tags Bare escentuals Stock Stock market

Japan-based cosmetics giant Shiseido has instigated the procedure for its tender offer to acquire mineral make-up specialist Bare Escentuals.

Shiseido will acquire the business through the Blush Acquisition Corporation, a business specifically established through Shiseido Americas for the purpose of acquiring California-based Bare Escentuals.

The company confirmed that it will pay the agreed price of $18.20 to the shareholder, which will be paid in cash, without interest and any withholding taxes will be deducted.

Investigations may mean offer period is extended

Shiseido says that its offer to purchase is scheduled to expire on March 6, but this date maybe subject to an extension and a further offer period.

Indeed, the offer may come across some opposition as shareholders have already launched a series of investigations through legal representatives in the US.

The law companies include Bull & Lifshitz, Kendall Law Group and Levi & Korsinsky, who have been hired to determine the processes undertaken by the board of directors to broker the deal with Shiseido.

Is offer price a fair one?

According to Washington-based law practice Finkelstein Thompson, their investigation will concentrate 'on the potential unfairness of the price to Bare Escentuals shareholders and the process by which the company's board of directors considered and approved the transaction'.

On January 14 Shiseido announced that it had offered to pay $1.7bn for all the outstanding shares in Bare Escentuals.

Shiseido said it had made an all-cash tender offer and second-step merger. The first step of the merger gives Shiseido voting rights in the company, while the second step means the deal has to be approved by the SEC to legitamize it, a procedure that can take as little as five weeks.

If the deal goes ahead it will mean that Bare Escentuals will be able to tap into Shiseido’s established distribution worldwide, which is likely to lead to significant market growth in the course of the next few years.

Established in 1994, in the period from 2001mineral make-up provider Bare Escentuals blossomed from an annual turnover of $30m to a current figure that is now in excess of $600m - growth that has been achieved on the back of huge interest in natural-based cosmetic products.

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