Morgan Stanley to buy big Korres stake

Morgan Stanley to buy big Korres stake

Majority ownership of the leading Greek natural cosmetics producer Korres is to pass into foreign hands, as the firm announced on Wednesday that it had signed a provisional agreement with Morgan Stanley and Chinese company Profex that will see the latter two obtaining share capital in the former of up to an indirect sum of 70 percent.

This will make Korres the second such firm in Greece to come under foreign control this year following the takeover of Apivita by Spanish group Puig.

Company founder Giorgos Korres stressed on Wednesday that he will hold on to a 30 percent stake in the firm as well as the management, adding that the development opens the way for Korres’s expansion to the Chinese market.

The agreement will have to be approved by all four systemic banks in Greece, as Korres has received a corporate loan of 25 million euros. However, Korres estimates that this process will only take a few weeks.

The transaction will be made through Cyprus-based company Nissos Holdings Ltd, founded by Korres last March. NHPEA Maiden Holding BV, an investment fund controlled by Morgan Stanley, will acquire 56 percent of Nissos and Profex another 14 percent, and then Nissos will buy out 52.3 percent of the Korres shares of which 6.6 percent belongs to Giorgos Korres and 45.7 percent to other stakeholders. The price agreed amounts to 5.08 euros per share, at a 25 percent premium.

When another 30 percent from Giorgos Korres is added, the Nissos stake in Korres will come to 82.3 percent, allowing it to squeeze out other shareholders. After the completion of the public proposal for the acquisition of the remaining stakes, Nissos will announce a 10-million-euro share capital increase, to be used for investment in production.

Shanghai-based Profex is owned by Greek entrepreneur Pavlos Kontomichalos and will undertake the exclusive distribution of Korres products in China, Hong Kong and Macao.

Korres announced on Wednesday that the existing plant at Oinofyta, north of Athens, is able to cover the demand of the Chinese market for at least the next couple of years.

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