Potential L’Oreal sale closely watched by French authorities
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

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

loreal0210

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.”

Disclosure

Dominion holds L’Oreal in its Global Trends Luxury Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.