PARIS — Ahead of L’Oréal and Nestlé’s general assembly meetings in the next two weeks, the Swiss food giant and Bettencourt family jointly published a rare press statement Thursday saying their agreement regarding the French beauty giant remains unchanged.
According to a shareholder pact signed in February 2004, Nestlé and the Bettencourt family are free to sell their stakes in L’Oréal as of April 29. Their shares stand at 29.6 percent and 30.8 percent, respectively. Also as part of the agreement, Nestlé cannot take a majority stake in L’Oréal unless Liliane Bettencourt, the daughter of L’Oréal’s founder Eugene Schueller, gives her permission or passes away, and, in that case, not until six months following her death. Other clauses continue to be effective until the due date mentioned in the 2004 agreement.
“There is a common understanding between Nestlé and the Bettencourt family that they both will act in common interest vis-à-vis L’Oréal,” said a Nestlé spokeswoman.
It is not widely believed there will be any change in L’Oréal ownership in the near term. In mid-February, Nestlé chief executive officer Paul Bulcke said the company would not alter its stake in L’Oréal in April.
“We are not in a hurry to do anything,” added Jim Singh, Nestlé’s chief financial officer, at the time.
If Nestlé’s holding in L’Oréal is raised to more than one-third, it would be obliged to launch a takeover bid, according to French law.
Speculation remains rife over what Nestlé will ultimately do with its stake in L’Oréal. Adding fuel to the fire is the family feud between Bettencourt and her daughter, Françoise Bettencourt Meyers, who is due to inherit her mother’s share in L’Oréal once she dies. Both sit on the firm’s board.
L’Oréal and Nestlé already operate two joint ventures: Galderma, the dermatology brand, and Innéov, for nutritional supplements.
In other L’Oréal news, L’Oréal’s case against Internet auction site eBay in France, which centers on the sale of counterfeit beauty products, was not concluded Wednesday, as expected. Instead, Paris’ Third Civil Court should hand down the decision on April 29.
It is the second time the decision has been postponed. Originally, it was set for April 8. On both occasions, court spokeswomen said a judgment can be delayed for numerous reasons, including the courts being overwhelmed with cases.
In 2007, the French beauty giant started legal proceedings against eBay in a number of European countries. Then, one year later, a Belgian court ruled in favor of eBay. In early March, proceedings began in London’s High Court of Justice.
Meanwhile, L’Oréal USA has agreed to acquire Idaho Barber & Beauty Supply, a leading salon distributor in Idaho that also has operations in Montana, Washington and other neighboring states, for an undisclosed sum.
The 72-year-old firm, which has more than 80 employees and serves more than 5,000 salons, is a family-run business managed and owned by Dick Copsey. The operations of IB&B will become part of Maly’s West, a division of SalonCentric, the professional products distribution operation of L’Oréal USA.
The IB&B acquisition, which is expected to close in about 60 days, follows L’Oréal USA’s acquisitions of Beauty Alliance, Inc. and Maly’s West in 2007 and Columbia Beauty Supply in 2008.