Potential L’Oreal sale closely watched by French authorities
In September, speculation that L’Oreal could be subject to a buyback or a takeover sent the cosmetic giant’s share price up. The cause of the speculation was the death of founding family heiress Liliane Bettencourt. According to analysts, this opens the door for stakeholder Nestle SA to either sell its 23% holding back to the business, or, perhaps, for L’Oreal to attract a takeover bid. However, despite the company not necessarily being a “strategic asset”, the French government will be watching closely in the event of a foreign takeover.
L’Oreal’s share price is up 17% so far this year
SOURCE: Yahoo Finance
Speaking on France 2 Television, the country’s Prime Minister, Edouard Philippe, said that he would be “obviously very careful” if a company form outside of France expressed an interest in L’Oreal.
Swiss food company Nestle has been under pressure from activist shareholder Dan Loeb to sell. Meanwhile, Nestle’s CEO, Mark Schneider, described L’Oreal as a “highly strategic” stake, and said, in February this year, that there was no urgency to changing the relationship.
Upon the passing of Mrs. Bettencourt, a Nestle spokeswoman said: “It is with great sadness that we received the news of the passing away of Mrs. Liliane Bettencourt. We express our most sincere condolences and deepest sympathy to Mrs. Bettencourt’s family and to all at L’Oreal at this difficult moment. As you can imagine, this is not the right time to make any further comment.”
Dominion holds L’Oreal in its Global Trends Luxury Fund.
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