L'Oreal buys out Body Shop |
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Published
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Fri, 17 Mar 2006 13:30
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PARIS: French cosmetic group L'Oreal SA is buying British cosmetics retailer The Body Shop International Plc. for 652 million pounds in cash.
L'Oreal, the world's largest cosmetics company, said the acquisition will not have any impact of its earnings in 2006, but it would contribute thereafter. Body Shop, which specialises in ethically sourced products and makes items such as honey and oat scrub mask and grape seed cream, will function as a separate business under L'Oreal and its founder Anita Roddick will be retained as a consultant.
The deal provides irrevocable undertakings and a call option -- from shareholder Beaverbridge Holdings --, which together constitute 42.6 per cent of Body Shop's ownership. Roddick and her family own about 19 per cent. The 300 pence-a-share offer is at a premium of 34.2 per cent of Body Shop's closing mid-market price of 223.5 pence-a-share on 21 February, the day before the bid was made.
L'Oreal said the offer is conditional on securing the needed clearances.
Anita and her husband Gordon Roddick had founded the business in 1976 in a small way selling toiletries made from natural ingredients sourced from the developing world in recycled packaging. After its successful years in the 1980s, it could not expand and had to face competition. It has now revived and is back in action with more than 2,000 stores in 53 countries. The two founders stepped down from managing the company in 2002
L'Oreal's chairman and chief executive officer Sir Lindsay Owen-James said a partnership between the two companies makes perfect sense. "Combining L'Oreal's expertise and knowledge of international markets with The Body Shop's distinct culture and values will benefit both companies," he said.
The news led to a rise in Body Shop shares by 10.7 per cent to 296 pence, while L'Oreal stocks went up 1.14 per cent at 75.50 euros.
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L'Oreal is eyeing British retailer Body Shop 