CLARINS MAY BE NEXT TAKEOVER TARGET

PARIS — Speculation has resurfaced that Groupe Clarins, one of the few remaining independent prizes of the French beauty world, might be the target of a takeover bid. Clarins, which had 1998 profits that rose 10 percent to $79.4 million on sales of $645 million, is frequently the target of takeover rumors. It has a firm grip on the prestige skin care market in Europe and has developed a nicely profitable, well-respected fragrance business with the Thierry Mugler scent Angel.
Dollar figures are calculated at current exchange rates.
In the past, the takeover rumors have usually emanated from beauty giant L’Oreal, but this time luxury goods group LVMH Moet Hennessy Louis Vuitton has made it to the top of the suitor list. Even Shiseido’s name is being bandied about, particularly since the Japanese beauty company’s chairman, Akira Gemma, told a French business paper this week that he was looking to expand the company’s international presence with acquisitions and partnerships.
Clarins’s stock has been particularly active lately. It closed Wednesday at $107.59, up 1.3 percent over the previous day’s close.
Clarins is still 60 percent family-owned and controlled by the Courtin family. Christian Courtin, president of the international division at Clarins, said there had been no contact from any company about a takeover bid. He speculated that shares had been increasing in value and volume lately in part due to Clarins’s good six-month results and to its 1-for-6 stock issue set to take place in October.
“People may be buying up extra shares in order to take advantage of the free stock,” he said.
Wednesday afternoon a L’Oreal spokesman declined comment on any takeover rumors. Analysts said they didn’t think this rumor had much basis in fact. “There are rumors about takeovers on all stocks at the moment, and about 80 percent are wrong,” said one analyst who asked not to be named. At the same time, though, they agreed Clarins was an attractive company.
“Why not Shiseido?” posited another analyst. “They’ve been talking about acquisitions in Europe, and they need to get outside of Japan.”
“Clarins, of course, is very tempting for everyone,” said the first analyst. “It is the number-one prestige skin care specialist in Europe, and most international companies, like Shiseido, Estee Lauder and Unilever, are weak in Europe. LVMH would also like to take over Clarins. LVMH is strong in fragrance, but is still looking for critical mass in skin care.”

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