Austrian billionnaire Reinold Geiger said he would buy back all the shares he does not own for nearly US$1.78 billion, the company said in a statement to the city's stock exchange on Monday night.
The offer, submitted with the support of US private equity giant Blackstone, concerns nearly 28 percent of the shares.
The firm soared as much as 12.9 percent to HK$33.30 in the morning before paring the gains.
The offer price of HK$34 per share was a 15.25 percent premium to its closing price of HK$29.50 when the company halted trading three weeks ago ahead of the offer.
Privatisation would free the company "from the pressures of the capital markets' expectations, regulatory costs and disclosure obligations, share price fluctuations, and sensitivity to short-term market and investor sentiment", the company said in the announcement.
Geiger believed significant further investment in marketing would be necessary to invigorate the brand's shares in increasingly competitive markets, citing pressure from weakening consumer sentiment and rising rivalry from local brands in China, the company's second-largest market.
L'Occitane International in September rejected an offer from Geiger's investment holding company, L'Occitane Group, which at the time owned more than 72 percent of the firm.
Founded in France's southern region of Provence in 1976, the luxury cosmetics retailer listed in Hong Kong in 2010.
Its share price peaked in 2022 at HK$32.45 ($4.14), more than double its IPO price.
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