the cosmetics manufacturer Natura &Co 🇧🇷NATU3) Work as Bank of America it’s the morgan stanley to sell a stake in its Aesop unit, according to people familiar with the matter.
Aesop, the luxury brand of company Brazil, has drawn interest from private equity firm CVC Capital Partners and competitors such as L’Occitane and Shiseido, said the people, who asked not to be named because the discussions are not public.
Natura initially preferred an initial public offering of shares to Aesop but switched to a stake sale through a private placement because of unfavorable equity markets, the people said.
A minority stake would be relatively easy to sell due to operational issues, and is now the most likely path Natura will take, one of the people said.
Discussions are at an early stage and could end without a deal, the people said.
Natura, Bank of America, Morgan Stanley and CVC did not comment. L’Occitane and Shiseido did not immediately respond to requests for comment. The Daily Mail previously reported interest from CVC, L’Occitane and Shiseido.
Aesop recorded revenue of almost R$603 million in the third quarter, accounting for around 7% of Natura’s total net revenue.
Analyst Luiz Guanais, from Banco BTG Pactual 🇧🇷BPAC11), estimated last month that Aesop could be worth around BRL 9 billion, considering the average multiple for the global cosmetics sector of around 15 times the 2022 ratio of the company’s value to earnings before interest, taxes, Depreciation and amortization.
Sao Paulo-based Natura said on Oct. 18 it was weighing options to unlock value in Aesop, including a possible IPO or spin-off, as the company seeks to restore investor confidence.
The announcement, part of a broader overhaul orchestrated by Fabio Barbosa, who took over as chairman this year, prompted JPMorgan to raise its rating on Natura’s stock from neutral to a buy-equivalent recommendation.
Natura posted net revenue of R$9 billion in the third quarter, below analysts’ estimates of R$9.29 billion.
The company’s shares continued to fall and accumulated a 54% drop in the year, leaving the company with a market value of R$ 16 billion.
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