Puig shares fell nearly 13% in early trading on Friday after Estee Lauder and the company ended merger discussions.
Reports indicated that Charlotte Tilbury sought to renegotiate terms related to her remaining stake in the company. This move complicated a potential merger.
Puig, which owns brands like Byredo, Carolina Herrera and Paco Rabanne, acquired the British makeup company in 2020 for $1.2 billion.
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.
Jefferies analyst Charles Brennan said: "While the outcome likely surprised the market, recent reports that Charlotte Tilbury was seeking to renegotiate terms had begun to erode that conviction."
Estee Lauder shares rose 10.1% after hours following the announcement.
