January 22, 2021

Dan Loeb Urges Nestlé to Sell Stake in L’Oréal

PARIS – The shares of L’Oréal and Nestlé surged Monday morning, hours after activist investor Dan Loeb contended the Swiss conglomerate should pull out of the French beauty giant.
On Sunday, his Third Point hedge fund sent a letter to investors arguing that Nestlé, the maker of KitKat, Corn Flakes and Nescafé, should sell its 23.3 percent holding in L’Oréal, the world’s largest beauty company. Third Point currently owns about 40 million shares of the Swiss conglomerate, which, including options, amounts to a value of more than $3.5 billion.
“Despite having arguably the best positioned portfolio in the consumer packaged goods industry, Nestlé shares have significantly underperformed most of their U.S. and European consumer staples peers on a three year, five year and ten year total shareholder return basis,” the letter contended. “One year returns have been driven largely by the market’s anticipation that with a newly appointed CEO, Nestlé will improve.”
Loeb also suggests Nestlé should shed nonessential operations.
A L’Oréal spokeswoman had no comment on the news. Nestlé could not be reached for comment at press time.
By 10:10 a.m. CET, L’Oréal stock had climbed 4 percent to 195.70 euros, and Nestlé shares were up 3.90 percent to 85.30 Swiss francs, or 78.56 euros and

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