L'Oreal willing and has means to buy Nestle's 29.5% stake in company in 2014, CEO says; stake valued at around US$29.1B

Nevin Barich

August 30, 2013 (EquityBites) – French cosmetics group L'Oreal SA (EPA:OR) is willing and has the means to buy in 2014 the 29.5% stake in it held by Swiss food and beverages group Nestle SA (VTX:NESN) and worth some EUR22bn (USD29.1bn), CEO Jean-Paul Agon was cited on Friday by Les Echos daily as saying.

Nestle and the Bettencourt family, who hold 30.5% in L'Oreal, have a 10-year agreement in place giving them the right of first refusal over their stakes. That accord is due to expire in April 2014.

Earlier this week, Nestle said the shareholders agreement will not be extended beyond its current expiry date, but it would like to keep all options open regarding its stake in L'Oreal, including the status quo.

As for the Bettencourt family, they said last week they have no intention of selling.

Reuters cited Liberum analyst Pablo Zuanic as saying that L'Oreal would want to acquire Nestle's stake in it to ensure independence.

New York brokerage Liberum said the French cosmetics giant could secure up to EUR35bn next year for share buybacks and deals, if it sells its stake in pharmaceutical group Sanofi SA (EPA:SAN) and borrows further funds accounting for three times its net debt to EBITDA, Reuters reported.

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