Investindustrial, a European PE firm has invited Alibaba’s founder Jack Ma to submit a joint bid of more than 800 million euros (almost $900 million) for L’Oreal’s The Body Shop, just a few days before the final bid is called.
Many companies worldwide are partnering up to make higher bids for the British-based cosmetics retailer brand. Since,The Body Shop is a well-known skin cosmetic brand name in the market, several big players are scooping down in the game, incuding names like Hong Kong-based Blue Pool Capital which plans to team up with Investindustrial and Brazil’s GP Investments, one of Latin America’s largest private equity firms are all joining hands with each other.
Last but not the least, the race is getting tougher with European private equity investor CVC Capital Partners also planning to submit a rival offer ahead of a June 7 deadline for final bids. Adding that another buyout firm, Advent, has decided to drop out of the contest, L’Oreal has asked prospective bidders to table offers of no less than 800 million euros.
L’Oreal is said to be reviewing its strategy for selling 'The Body Shop', since February month this year, which it bought for 652 million pounds ($840 million) in 2006. Founded in 1976 by British entrepreneur Anita Roddick, the company was a pioneer in the ethical beauty industry but has since fallen victim to increased competition from newcomers also offering similar products based on natural ingredients and without animal-testing.
Last year The Body Shop, which has more than 3,000 stores worldwide, saw its revenue drop 4.8 % to 920.8 million euros and its operating profit fall 38 % to 33.8 million euros.
Though L’Oreal was hoping for a valuation of close to 1 billion euros for the business, such a price was challenging to start with, given the chain’s down performance in the recent past. The Body Shop has also drawn interest from a handful of industry players including Brazilian make-up firm Natura Cosmeticos, which took part in the initial stages of the auction, but shows little interest now.
As the race gets narrowed further, it will be interesting to see the auction reach its final stages. Let's see who finally acquires the premium cosmetic brand The Body Shop.