Revolution Beauty Rejects Takeover Bid, Eyes Shareholder Fundraising.
The London-listed cosmetics firm turned down an offer from private equity firm True, citing undervaluation. The company is now likely to seek fresh capital from its existing investors as it navigates a challenging financial period.
Revolution Beauty has declined a takeover proposal from private equity specialist True, a move that likely signals a renewed effort to raise capital from its current shareholders, according to sources familiar with the situation.
The makeup and haircare company, whose products are sold online and in major high street retailers like Boots and Superdrug, initiated a formal sale process in May. By June, it had received interest from several parties. However, True was the only firm to submit a definitive bid for the London-listed company. One source indicated that the offer was ultimately deemed to undervalue Revolution Beauty.
Revolution Beauty has refrained from commenting on the matter. True and Debenhams, the company’s largest shareholder, have not responded to requests for comment.
This development follows the withdrawal of Mike Ashley’s Frasers Group from the bidding process last month. Frasers had previously expressed interest and participated in the due diligence process.
Founded in Kent in 2014, Revolution Beauty went public during a post-pandemic boom with a valuation close to 500 million pounds. However, its market value has since plummeted to approximately 12 million pounds, according to LSEG data.
With the rejection of the takeover offer, Revolution Beauty is expected to revive plans to raise funds from its key shareholders, a strategy it had been considering earlier this year. The company had previously informed shareholders it was reviewing its funding structure and contemplating a fundraise after its annual sales saw a significant decline of more than a quarter.
The participation of Debenhams in any future equity raise could be contingent on the completion of its own debt refinancing plans. Debenhams, which is owned by the Boohoo Group, is a significant stakeholder in the cosmetics brand.
In May, Revolution Beauty also disclosed that it had entered into discussions with its lenders to amend and extend the terms of its revolving credit facilities. The company has been navigating a tough retail climate, marked by declining online sales and the need for a major restructuring of its product portfolio.
