The Body Shop, Natura in $1.1b deal

paris — French cosmetics and luxury goods group L’Oreal has started exclusive talks to sell its The Body Shop business to Brazilian make-up company Natura Cosmeticos in a possible €1 billion ($1.1 billion) deal.

L’Oreal said earlier this year it was reviewing its strategy for The Body Shop, which it bought for £52 million in 2006, and that the sale of the business had attracted a wide range of bidders. L’Oreal said on Friday it had received a firm offer from Natura Cosmeticos, and that the proposed deal put an enterprise value of €1 billion on the four decades old beauty brand, a pioneer in mass marketing of cosmetics made without animal testing and with natural ingredients.

L’Oreal shares were up 1.4 per cent in early session trading, outperforming a 1 per cent gain on France’s benchmark CAC-40 index and a 0.4 per cent rise on the STOXX Europe 600 Personal & Household Goods index.

Keren Finance fund manager Gregory Moore said the price tag had pleased L’Oreal investors, given earlier reports it could be sold for around €800 million.

“The stock has reacted well to the news, because there were some people who thought it could be sold for less,” said Moore, whose firm owns L’Oreal shares in its portfolio. L’Oreal shares are up around 10 per cent so far in 2017, broadly in line with a similar rise on the CAC-40, with the stock having touched a record high earlier this month. — Reuters