Shiseido to Acquire Bare Escentuals ($1.7B Tender Offer)

I have been wearing Bare Minerals foundation for more than four years so, for me, this is really big news! Bare Minerals is a mineral makeup brand owned by Bare Escentuals–the company credited with creating the popular “mineral makeup” category. BE’s valuable innovation, positioning, and network caught the eye of Shiseido, the Japanese cosmetics company that announced a $1.7B cash tender offer to purchase BE on January 14th.

You can check out the relevant SEC filings here. Bare Escentuals stockholders will receive $18.20 per share, a 40% premium. I had thought about buying BE stock earlier this year when it was trading for something like $4 per share ($2.45 per share 52-week low). That would have made for a healthy gain! But the big winners here are BE CEO Leslie Blodgett (6.1% ownership), Capital Research Global Investors (11.0% ownership), and Berkshire Partners (15.6% ownership).

Of course, there are others who expect to reap rewards. From the Schedule TO:

The transaction will strengthen both companies and provide a platform for further growth, ultimately bringing significant benefits to consumers, employees and shareholders by:

·	Expanding Shiseido’s brand portfolio into the mineral-based cosmetics market, attracting a wider customer base;

·	Creating a complementary multi-channel and truly global distribution network, giving Bare Escentuals greater access to Japan, one of the world’s largest cosmetics markets, as well as other fast-growing Asian markets such as China;

·	Strengthening Shiseido’s successful U.S. and European business;

·	Maximizing both companies’ production capabilities and R&D resources;

·	Delivering a significant premium to Bare Escentuals shareholders; and

·	Offering compelling growth prospects and future value creation for Shiseido shareholders.

BE CEO Leslie Blodgett is the face of the brand (which got a lot of its initial momentum through Leslie Blodgett’s personal appearances on QVC). I am interested to see how her involvement evolves in the long term. In the short term, of course, she has signed on with Shiseido.

Shiseido’s acquisition overview .ppt is appended to the Schedule TO for those who are interested in more detail in terms of strategy and numbers.

Shearman & Sterling represents Shiseido in the deal.

Read the full article: Shiseido to Acquire Bare Escentuals ($1.7B Tender Offer)

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