RE-L'Oreal/Nestles
| L’Oreal could be takeover target | | Posted on Friday, 22 September 2017 14:20 | French cosmetics giant is the subject of takeover speculation following the death of founding family matriarch Liliane Bettencourt.
Multiple sources have picked up on speculation by analysts who believe the heiress’ passing could be a catalyst for a change in the Paris-listed group’s shareholder base.
Based on L’Oreal’s closing share price of EUR 176.60 on 21st September, the last trading day prior to the deal being reported, the company can be valued at EUR 98.88 billion.
Jefferies analyst Martin Deboo told Bloomberg Bettencourt’s passing at the age of 94 on 21st September means speculation is likely to be rife, particularly concerning the 23.0 per cent stake owned by Swiss food and drink giant Nestle.
However, he added that the matriarch’s children will also have a say in the matter and a lot hangs on their intentions.
In addition, under the terms of a previous agreement with L’Oreal, Nestle is unable to buy any more stock in the business until six months after Bettencourt’s death.
Tyler Tebbs of Olivetree Securities, speaking to the Financial Times, noted that the Swiss company has strict acquisition criteria, not all of which are met by the cosmetics company.
L’Oreal is renowned for its range of cosmetics products, some of which are distributed under brand names like Garnier, Maybelline and Lancôme.
The company’s stock dropped following Bettencourt’s death yesterday, having finished the day at EUR 178.30 on 20th September.
Shares were trading at EUR 182.90 at 15:58 on 22nd September.
L’Oreal posted consolidated sales of EUR 25.84 billion in 2016, up from EUR 25.26 billion over the preceding 12 months.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 164 deals targeting toilet preparation manufacturers announced worldwide since the beginning of 2017.
The most valuable of these was worth USD 1.19 billion and involved Natura acquiring UK-based the Body Shop from L’Oreal earlier this month.
© Zephus Ltd
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