L'Oreal Remains In Spotlight As Nestlé Plays Cards Close To Chest

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Shares in French cosmetics maker L'Oreal have surged in the past two weeks following renewed speculation that food-giant Nestlé is set to launch a bid for the firm. Conversely, shares in Nestlé have underperformed over the last year and this is partly attributable to concerns that it could pursue a costly takeover of the cosmetics giant. Nestlé is cash rich having sold off its stake in US eyecare firm Alcon to multinational pharmaceutical company Novartis for US$39bn. However, a lack of synergies between food and high-end cosmetics means that investors are apprehensive about any diversification away from its core food