Investing.com -- Puig shares fell nearly 13% in early trading on Friday after Estee Lauder and the company ended merger discussions that were first disclosed in March.

Recent reports indicated that Charlotte Tilbury was seeking to renegotiate terms related to her remaining stake in the company. Tilbury, founder of the premium cosmetics brand bearing her name, reportedly sought to renegotiate the terms of the company’s buyout, a move that complicated a potential merger between Puig and Estée Lauder, according to Spanish newspaper Expansión.

Puig, which owns brands including Byredo, Carolina Herrera and Paco Rabanne, acquired the British makeup company in 2020 in a deal reportedly valued at $1.2 billion. The group held a 78.5% stake in the brand, while Tilbury retained the remaining minority interest.

A change-of-control clause could have given Tilbury the right to trigger a forced sale of her minority interest, valued at approximately $986 million, which may have affected the deal.

"While the outcome likely surprised the market, given strong perceived family support, recent reports that Charlotte Tilbury was seeking to renegotiate terms tied to her remaining stake had begun to erode that conviction," Jefferies analyst Charles Brennan said.

Estee Lauder shares rose 10.1% after hours following the announcement.

"Investor skepticism around a potential Puig transaction had centered on its scale, structural complexity, and implications for portfolio strategy," Brennan added.