L'Oreal is eyeing British retailer Body Shop |
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Published
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Fri, 24 Feb 2006 20:15
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LONDON: French cosmetic major L'Oreal SA revealed that it is considering bidding for British firm Body Shop International Plc., a global retailer of naturally-inspired skin and hair care solutions.
L'Oreal, known for its Ambre Solaire sun cream and Lancome lipsticks, said it will approach Body Shop with a cash offer. The development sent Body Shop's shares shooting to levels as high as 280 pence a share. The hike gave the company a market valuation of 646 million pounds.
L'Oreal issued a statement to the London Stock Exchange saying its management is "continually evaluating a wide range of strategic alternatives that may add value to its shareholders, including a possible offer for Body Shop.
"Any offer, if made, is likely to be solely 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," it added.
Body Shop said it has not received any proposal as yet.
Body Shop, with its products based on natural ingredients and known for its ethical policies, was founded by the Roddick family in 1976, which now owns around 19 per cent holding in the company. The family has already indicated it is planning to reduce its holding. Co-founder Iain McGlinn too has a considerable holding in the company. The Roddicks had started the business from a small Brighton shop selling toiletries made from natural raw ingredients sourced from the developing world in recycled packaging.
The company flourished in the 1980s, but its plans to enter the U.S. market ended in a fiasco with the retailers. It has now consolidated to some extent with 2,000 stores in 53 countries.
The retailer said in January that its full-year profits could be only marginally ahead of last year's 39.2 million pounds as sales were lower than forecast. It has thus become a takeover target.
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