Sanofi Aventis' Chief Executive Officer said on Friday that repurchasing L'Oreal's 9% stake in the drugmaker might make sense. This was after a possible sale was seen of the USD12 billion company's holding.
The fate of L'Oreal's stake in Sanofi had been fuelled by comments made by L'Oreal's chief executive officer. The CEO said that the cosmetics maker could buy back its EUR23 billion stake in Nestle if L'Oreal would sell the EUR9 billion stake owned in Sanofi.
The comments made by the cosmetics company already dragged disappointing quarterly results. However, some analysts said Sanofi could make use of the opportunity to buy back shares with cheap debt. This way, it would boost its earnings.
Sanofi CEO Chris Viehbacher said it was difficult to comment regarding the repurchase as the matter was highly conditional.
Viehbacher told Bank of America Merrill Lynch in a London healthcare conference, "We certainly have cash flow to do some things. Whether we would intervene in that or not is going to be a function of - if it does happen - what at that given point in time is the best use of capital. It may well be opportune to have a look at it."
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