L'Oreal buys Body Shop for £652m

Click to follow
The Independent Online

Cosmetics retailer Body Shop today agreed to a £652.3 million takeover by L'Oreal.

Body Shop accepted an offer of 300p a share from the French firm - a large premium on its closing price of 268p.

It is expected that Anita and Gordon Roddick, who set up Body Shop 30 years ago, will make £130 million from the sale.

Dame Anita said: "For both Gordon and I, this is without doubt the best 30th anniversary gift the Body Shop could have received.

"L'Oreal has displayed visionary leadership in wanting to be an authentic advocate and supporter of our values."

L'Oreal, which makes Ambre Solaire suncream and Lancome lipsticks, said the Body Shop brand would be retained and the company would continue to be based in and run independently from the UK.

The French firm said Body Shop would enhance its business because of its "sizeable and complimentary brand" across 54 countries, which delivered revenues of £419 million last year.

It also said the deal would give it increased presence in the "masstige" sector - mass market combined with prestige - which Body Shop has worked hard to exploit over the last four years.

In a statement to the stock market today, the two companies said the proposed takeover depended on regulatory clearance.

L'Oreal chief executive Sir Lindsay Owen-Jones, who was born in Wallasey, Merseyside, said: "We have always had great respect for the Body Shop's success and for its strong identity and values created by its outstanding founder, Dame Anita Roddick.

"A partnership between our companies makes perfect sense. Combining L'Oreal's expertise and knowledge of international markets with the Body Shop's distinct culture and values will benefit both companies."

Iain McGlinn, one of the original investors and an old friend of Dame Anita and Mr Roddick, will make around £140 million from his 21% stake in the company. The Body Shop board today urged other shareholders to back the sale.

Shares in Body Shop surged more than 10% today towards the 300p mark offered by L'Oreal. They were as low as 56.5p three years ago.

The Roddicks started Body Shop with a store in Brighton in 1976 to help support their two young daughters, Justine and Samantha. They opened a second store six months later and now have 2,085 branches around the world, including 304 in the UK.

Body Shop, which is based in Littlehampton, West Sussex, represented an ethical alternative to the traditional approach to cosmetics and was against animal testing.

Throughout her career, Dame Anita has campaigned passionately around ethical issues such as fair trade and sustainable development.