L'Oreal signalled its readiness to buy Nestle's 23 percent stake in the world's biggest cosmetics firm on Friday, which along with strong results lifted the French company's shares. L'Oreal said it could finance a purchase of the holding, which is now worth around 22.3 billion euros ($27.4 billion), with cash, by selling its stake in French pharmaceutical group Sanofi or through borrowing.
"If Nestle one day wants to sell, we are ready," Chairman and Chief Executive Jean-Paul Agon said after L'Oreal released fourth-quarter earnings. Billionaire Liliane Bettencourt's death in September has focused attention on how L'Oreal's founding family and its major shareholder Swiss food group Nestle would manage their stakes. Investor Daniel Loeb, founder of hedge fund Third Point, has pushed for Nestle to sell its L'Oreal stake among his demands for the Swiss firm to speed a strategy overhaul.
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