A renewed focus on strategy, boosting relations with investors and divestitures are what experts and sources believe is in the cards for the Estée Lauder Cos. in the near-term following the ending of merger talks with Puig.
The prospect of any more potential multibillion-dollar deals is seen as a few years off.
As a refresher, on May 21 the two beauty companies revealed they had terminated discussions regarding a potential business combination. During a banking conference in Paris last week, Stéphane de La Faverie, chief executive officer of the Estée Lauder Cos., revealed it all came down to money.
One banking source said: “As a public stock, investors will basically tell them, ‘OK, so Puig maybe on paper made sense.’ I think people had questions around it, but I don’t think public investors will tell them, ‘now go try to do another deal,’ unless you’re just going to sell the company, and I don’t think the [Lauder] family is there.”
Still, the group has to make some bold moves to kick-start both its shares and growth, given the collapse in its share price. Lauder’s stock is currently trading around $84.64 with a market capitalization of $30.62 billion, down from its peak of over $370 in January 2022, which gave it a market cap of more than $133 billion at the time. Its stock closed up 11.9 percent to $88.32 the day after it was revealed the Puig talks had ended, but for the year to date it is down more than 20 percent.
