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L'Oreal licks lips over Body Shop
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 By
Harry Wallop (Filed: 24/02/2006)
Body Shop, the retail chain famed for its campaigns to save the
whale and end global poverty, could be swallowed by L'Oréal,
the world's largest cosmetics group.
The French giant behind Ambre Solaire sun cream and Lancome lipsticks
issued a statement yesterday saying it was always examining strategic
options, and one current idea included "a possible offer for
Body Shop. Any offer, if made, is likely to be solely in cash."
Eva Longoria, one of the faces of L'Oreal
This comment sent Body Shop's shares briefly to a 14-year high,
before closing up 18 to 265p.
L'Oréal's statement came just 24 hours after Body Shop's
own board had been forced to say that it had no idea why its shares
had risen so much. At the start of the week they were trading at
just 220p.
Any takeover would require the approval of the chain's founder,
Dame Anita Roddick, who with her husband, Gordon, owns 18pc of the
shares, and Iain McGlinn. He was the only person willing to back
Dame Anita when she first started making cocoa butter lotions, which
she packaged in urine sample bottles and sold in her Brighton shop.
Mr McGlinn holds a 22.6pc stake.
The Roddicks have been sellers of their shares in the past 12 months,
with Dame Anita saying: "All my wealth is in the shares. My
intention is to give my money away." However, neither L'Oréal
nor Body Shop have started any talks.
Analysts on both sides of the Channel were perplexed as to why
L'Oréal, the cosmetics powerhouse, whose shares are worth
€50.2bn (£34.1bn), would be interested in Body Shop's
collection of 2,000 stores scattered around the globe.
Steve Davies at Numis said: "I can understand why L'Oréal
might possibly want to license the brand, but it would be very unusual
for a manufacturer to own a retail chain."
L'Oréal owns a small number of standalone stores under its
Kiehl's brand. However, nearly all its products are sold through
third-party retailers.
Most French analysts were extremely sceptical of any deal going
ahead, despite L'Oréal making it clear last week it was on
the look-out for acquisitions.
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http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/02/24/cnbody24.xml&menuId=242&sSheet=/money/2006/02/24/ixcity.html
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