L'Or?al has confirmed that an offer for Body Shop International could be in the pipeline as one of a number of strategic initiatives that the group is considering.
Analysts suggest that the company could be worth as much as ?641m ($1.1bn) although L?Or?al has stressed that no approach has so far been made for the group.
The L?Or?al statement reads: ‘L'Oreal?s management is continually evaluating a wide range of strategic alternatives that may add value to its shareholders, including a possible offer for Body Shop. Any offer, if made, is likely to be solely in cash.’
Body Shop generated sales of ?419m ($730m) in 2005 and Jean-Paul Agon, who takes over as L?Or?al Ceo in April has already indicated that the company may make acquisitions to increase market share.
Meanwhile, L?Or?al has reported that China has now passed Japan as the company?s single biggest market in Asia for the first time. The cosmetics giant generated sales of E343m from mainland China and E83m from Hong Kong respectively last year.