L’Oreal Mulls Body Shop Buy
By Staff -- Gifts and Dec, 2/23/2006 11:38:00 AM
London — L’Oreal, the world’s largest beauty company, today said that it might bid for UK personal care company Body Shop Intl., according to a Reuters report.
While The Body Shop had no comment on its possible acquisition, L’Oreal issued a prepared statement acknowledging that its corporate strategy includes assessing ways of adding value to its shares.
The announcement sent The Body Shop’s share price skyrocketing to a 14-year high of $49.08 on the London Stock Exchange, before closing at $46.44, still up 7.29 percent over the previous day. L’Oreal shares, traded on the Paris exchange, increased 2.35 percent during the day to close at the U.S. equivalent of $90.92.
"L'Oreal's management is continually evaluating a wide range of strategic alternatives that may add value to its shareholders, including a possible offer for Body Shop," L'Oreal commented in a statement to the London Stock Exchange. "Any offer, if made, is likely to be in cash. However, no decision has been made regarding any offer. L'Oreal's board has not been consulted, and no approach has been made to Body Shop,” the statement added.
But Reuters reports that earlier this month, L’Oreal’s incoming chief executive, Jean-Paul Agon, did say the company was looking for acquisitions to accelerate growth, and that pursuing growth would be the company’s number one priority.
The Body Shop, which sells ethically sourced bath and body product through more than 2,000 stores in 53 countries, issued a profit warning in January after weaker-than-expected sales.
The Roddick family, which founded The Body Shop in 1976, owns approximately 19 percent of the company, and family members have already indicated willingness to sell by reducing their shareholding over the last 12 to 18 months. Co-founder Iain McGlinn's shareholding takes the founders’ total to about 40 percent.
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