November 25, 2020

L’Oréal Stock Climbs on Nestlé Speculation

PARIS — L’Oréal’s stock climbed steeply during Friday trading, a day after the death of Liliane Bettencourt, the sole child of the company’s founder, was announced, triggering speculation about what changes her passing might prompt — if any — in the relationship between the Bettencourt family and Nestlé.
The two parties, which comprise the beauty-maker’s largest individual stakeholders — with 33.05 percent and 23.3 percent, respectively — have a shareholders’ agreement that is unlocked six months after her demise.
The principle terms of that pact outline that neither party could increase its stake in L’Oréal during the lifetime of Bettencourt and in the six months after her death. That means starting in March, the parties no longer have to work in concert. (Each has been free to offer its shares to any third party since April 2014.)
L’Oréal shares surged more than 6 percent during Friday trading before closing up 2.5 percent to 180.95 euros. Meanwhile, Nestlé’s stock gained 0.2 percent to 80.55 Swiss francs, or $83.
Analysts outlined a few main scenarios that could unfurl including: the companies maintaining their status quo, L’Oréal buying back Nestlé’s stake, or Nestlé either upping its share in the beauty giant or acquiring the company outright. The

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