CORRECT(2/19):Nestle Hints Will Keep L'Oreal;No Alcon Terms Change
February 20 2009 - 5:15AM
Dow Jones News
Nestle S.A. (NESN.VX) will likely keep its large stake in French
cosmetics company L'Oreal S.A. (12032.FR) for the time being and
doesn't plan to change the terms of the sale of eye-care company
Alcon Inc. (ACL), executives said Thursday.
"We're not in a hurry on L'Oreal. Our commitment remains
unchanged during the lifetime of Madame Bettencourt," Chief
Financial Officer James Singh said during a call with analysts,
referring to Nestle's stake of around 29% and its lockup agreement
with the other major L'Oreal shareholder, the French family
Bettencourt which owns around 30%.
At a media conference, Nestle Chief Executive Officer Paul
Bulcke said the statement can be interpreted as Nestle's intention
to hold on to its L'Oreal stake.
Nestle, the world's largest food and beverages company, and the
French Bettencourt family have a standstill agreement on L'Oreal,
part of which will expire April 29. Nestle will then be able to
sell part or all of its stake. The treaty also includes a ban on
any increase in either partner's stake as long as L'Oreal heiress
Liliane Bettencourt is alive.
Singh said Nestle doesn't plan to re-negotiate the terms of the
divestment of Alcon to Novartis AG (NOVN.VX).
Under a deal agreed in 2008, Nestle has the right to sell the
remaining 52% stake in Alcon between January 2010 and July 2011 to
Novartis at a 20% premium of the average share price during the
week before the sale, not exceeding $181 a share.
A recent decline in Alcon's share price has led to speculation
the agreement may be tweaked.
Earlier Thursday, Nestle reported a 69% rise in 2008 net profit
to 18.04 billion Swiss francs ($15.4 billion), boosted by a $10.4
billion gain on the first tranche of the Alcon divestment.
Company Web site: www.nestle.com
-By Martin Gelnar, Dow Jones Newswires; +41 43 443 8042;
martin.gelnar@dowjones.com