Jean-Paul Agon, CEO of L’oréal , said Friday that the world’s number one cosmetics had the means to redeem the share of 23% held by Nestlé in the group if the food giant switzerland took the decision to sell this asset. “We have € 1.8 billion of cash and our share in Sanofi (…) there are also large banks who have told us that they would be delighted to lend us money,” he said during a press conference held the day after the publication of the fourth quarter results of L’oréal. “If Nestlé wants to sell his share in L’oréal, one day, we will be ready to redeem it. The decision is in the camp of Nestlé,” said Jean-Paul Agon.
Nestlé, whose title wins Friday 0,71%, did not wish to comment. Sanofi owned approximately 9% by l’oréal, decreased -0,35% in the Stock market. The pharmaceutical company did not want to comment on this subject. “This is hardly surprising, but it may excite certain : the acquisition of participation by l’oréal, which is funded in part by the sale of its own stake in Sanofi, would be accretive by approximately 10% on the earnings per share”, believe analysts at Investec in respect of the statement of Jean-Paul Agon. A possible trigger of the operation could be that the date of 22 march, which is six months after the death of Liliane Bettencourt, heiress of the cosmetics group French, added the analysts.
The family Bettencourt-Meyers is the principal shareholder of L’oréal, with 33% of the capital, in front of the Nestlé group. The two parties are bound by a shareholders ‘ agreement which prohibits them from increasing their share in L’oréal until six months after the death of Liliane Bettencourt. “We do not see (…) a reversal imminent, Nestlé, which was reiterated in September its commitment to the l’oréal”, shade, however the analysts of Barclays.
“A shareholders ‘pact”
Questions about the L’oréal occur on a regular basis since the death, at the end of September, of Liliane Bettencourt, the daughter of the founder of the group.
The family Bettencourt-Meyers is the principal shareholder of L’oréal, with 33% of the capital, in front of the Nestlé group. The two parties are bound by a shareholders ‘ agreement which prohibits them from increasing their share in L’oréal until six months after the death of Liliane Bettencourt.
The title of L’oréal evolves at the head of the CAC 40 on Friday morning, after the publication of the annual results considered to be sound of the cosmetics group, which has reaffirmed its commitment to buy back the share held by Nestlé on its capital if the swiss group has decided to sell it.
The share gains of 1.37%
A 11h17, the action gains of 1.37% to 174,15€, when the CAC 40 is falling in the same time -0,48%. L’oréal has state Thursday evening to a growth of 4.8 per cent of its turnover on a comparable basis in 2017, compared to 4.7% in 2016, after an acceleration to 5.5% in the fourth quarter, a bit higher than the 5% expected by analysts.
The operating income increased 3% to 4.67 billion euros on the year, while the operating income margin increased 40 basis points to 18%, thanks to the sale of The Body Shop. “Generally, we perceive these results as being solid, each division has recorded organic growth in sales above our expectations and the consensus in the fourth quarter,” noted in a note analysts at Goldman Sachs.
Those of Barclays indicate that this organic growth better than expected compensates for the decline in the margin in 2017 on a comparable basis, linked to an increased research spending and investment.