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L’Oreal up 1.4% after Nestle’s plans to sell $10 billion worth of shares -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: L’Oreal, the French cosmetics manufacturer, displays a cosmetic display during the official opening of Terminal 1 of Nice’s international airport Terminal 1. Nice, France, June 10, 2016. REUTERS/Eric Gaillard

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PARIS (Reuters) – L’Oreal shares rose 1.4% on Wednesday following Nestle’s Tuesday announcement that it will reduce its share in French cosmetics company to around 20% through the sale of shares valued at 8.9 billion euros (10.05 billion).

Nestle announced that it now holds 20.1% in L’Oreal after the transaction, which is a decrease from its previous 23.3%. L’Oreal will meanwhile buy back shares equal to 4% of its capital. They’ll then cancel the stock by Aug. 29.

L’Oreal is currently paying 400 euro per share. The company expects the transaction to have an accretive impact on its earnings per share by more than 4 percent in the full year. L’Oreal is using both cash and credit to pay the beauty firm.

The transaction is expected to close within the next days. However, Bettencourt Meyers’ stake will rise to 34.7%, from 33.3%. They will no longer be required to make a takeover bid, as required by law for capital ownership thresholds higher than one-third.

($1 = 0.8859 euros)

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