00:00The rumours in the market, the comments in the market are around the brand which is 78-79% owned
00:08by Pooh's Charlotte Tilbury and that there is, you know, there's a put call option in place till 2031 with
00:18a view that perhaps more was expected in terms of valuation from the original owner.
00:24But really, we don't know that it is that. And there was a lot riding on this deal coming together,
00:30really, given that Estée Lauder was amid a big strategic overhaul under its CEO, Stéphane de la Fevry.
00:38So, you know, there are a lot of things going on. Also, the added risks in the market, too, with
00:44what's happening in Iran, the knock-on impact onto travel retail, which has been with us since the middle of
00:50March. So many different things, really.
00:54Where does Estée Lauder go from here on out then? Because they're left to focus on reviving their company and
00:59they've reported three years of annual sales drop.
01:03They did. I think if I look at both companies, the reason for them coming together was because if I
01:09think about Estée Lauder and where the market's been in the last couple of years, Estée Lauder only has about
01:1419% of its business in fragrance.
01:16Whereas the majority of the business of Pouge, although it's built in makeup and skincare, its history is in fragrances
01:25with Jean-Paul Gaultier and then also Carolina Herrera, Paco Rabanne and others.
01:33So it was a combination of the two of those coming together that if there was some excitement, that was
01:38it.
01:39But overall, if we think about Estée Lauder, they are doing more in innovation.
01:44They are doing more in shifting online. They are doing more in cost savings.
01:47They have a huge strategy running at the moment, the Profit Growth Programme, PRGP, where they're looking actually for savings
01:59of 1 to 1.2 billion to start to come through from next fiscal year.
02:04So fiscal 27, it's been a big upfront cost. And so a lot of the maybe risk and analysis and
02:14the questions on these two companies coming together were just when the growth and the profits are supposed to come
02:21through.
02:22Would Pouge have inhibited that and that it would have taken them longer to turn around?
02:27So certainly today, Pouge's share price is down and Estée Lauder's is up.
02:32And that's contrary to how it was on the day when it was announced two months ago.
02:37Very quickly, Deb, before we let you go, is Pouge still on the lookout for a merger partner?
02:43The issue is going to be that if Charlotte Tilbury is a part of the contested deal, that carries forward
02:53and so could be a bit of a poison pill potentially.
02:57I would imagine that both of these companies are looking for acquisitions, that it could make sense for both of
03:02them.
03:02You know, Pouge could find more of a global platform and Estée Lauder needs for me more in fragrances.
03:10I've said that for several years.
03:12So I think there were ways forward for both of them within the M&A field.
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