What to Watch: Nestlé’s Stake in L’Oréal

Will Nestlé maintain stake in L’Oréal? Only time will tell. March 21 is the expiration date of the longstanding shareholder agreement between the Swiss conglomerate and the Bettencourt family — L’Oréal’s two largest individual shareholders, with stakes of 23.3 percent and 33.05 percent, respectively. The principle terms of the pact outline that neither party could increase its stake in L’Oréal during the lifetime of Liliane Bettencourt, the sole child of the company’s founder, or six months after her death, which happened on Sept. 21. That means the countdown has begun, and starting on March 21 the parties no longer have to work in concert. (Each has been free to offer its shares to any third party since April 2014.) Financial analysts have outlined a few main scenarios that could unfurl, including the companies maintaining their status quo; L’Oréal buying back Nestlé’s stake — partially financed by the sale of its 9.4 percent stake in Sanofi, or Nestlé either upping its share in the beauty giant or acquiring the company outright. The first and second possibilities are considered the most likely. During a conference call with analysts on Sept. 26, Nestlé chief executive officer Mark Schneider said the company had no intention of changing its L’Oréal

Follow WWD on Twitter or become a fan on Facebook.

Read More...

from WWDWWD http://ift.tt/2qrm3WT