L’Oreal ‘advances’ for sale of Nestle’s holding

Bloomberg

L’Oreal SA shares surged the most in seven years on speculation that the death of the founding family’s matriarch, Liliane Bettencourt, could clear up the cosmetics maker’s ownership through a takeover or a buyback.
Bettencourt’s death raises questions about the stake Nestle SA has held in the French company for more than four decades. Her passing makes it more likely that the Swiss food giant will someday sell that 23 percent holding, worth about $28 billion, to L’Oreal, according to analysts. Another possibility is that L’Oreal attracts a takeover bid.
“Speculation will now inevitably be reignited around Nestle’s intentions towards its L’Oreal stake,” Martin Deboo, an analyst at Jefferies, said in a report. “Much will depend on the intentions of the Bettencourt enfants.” L’Oreal climbed 2.4 percent to 180.85 euros at 1:47 pm in Paris after rising as much as 6.7 percent earlier. Nestle has faced calls to sell its stake in L’Oreal, most recently from activist shareholder Dan Loeb, who revealed a stake of about 1.3 percent in the Swiss food company in June. Nestle Chief Executive Officer Mark Schneider told Bloomberg Television in February that the L’Oreal stake is “highly strategic” and there is no short-term urgency to alter the relationship.
“It is with great sadness that we received the news of the passing away of Mrs. Liliane Bettencourt,” a Nestle spokeswoman said via email.