UPDATE 1-L’Oreal happy with Sanofi stake, not with price

* CEO says no plans to sell Sanofi stake in short term

* Repeats tackling second half with confidence

* Shares rise over 5 pct after results beat forecasts

* CEO says cosmetics consumption holding up

(Adds CEO comments, share price, background)

By Nina Sovich

PARIS, Aug 25 (BestGrowthStock) – L’Oreal (OREP.PA: ) said it had no
short-term plans to sell its stake in Sanofi-Aventis (SASY.PA: ),
whose shares have lost nearly a fifth this year and which
sources say is seeking to buy U.S. biotech Genzyme (GENZ.O: ).

The cosmetics giant reiterated that the 9 percent stake,
which is worth about 5.3 billion euros ($6.7 billion), was a
financial investment and not a strategic one.

“We are a happy investor, a loyal investor. (We) would be
happier if the (share) price was higher,” Chief Executive
Jean-Paul Agon told an analyst briefing on Thursday after
L’Oreal posted forecast-beating results. [ID:nLDE67O1U8]

There are “no plans for the short term” for the stake, he
added.

Sanofi’s shares have lost 19 percent this year, with
concerns weighing about where it will find new sales as some of
its drugs lose patent protection. Analysts expect L’Oreal,
Sanofi’s top shareholder, will sell the stake if it needs to
finance a major acquisition itself.

Sanofi has offered to buy Genzyme, one of the world’s
biggest biotech companies and a leading maker of drugs for rare
diseases, for $69 a share, according to sources familiar with
the situation, valuing the company at about $18.4 billion.

Genzyme is looking for a figure of at least $80 and wants an
opening offer of $75 before it will even open its books to the
company, people familiar with the situation say.

L’Oreal and fellow Sanofi shareholder Total (TOTF.PA: ) do not
want the drugmaker to pay too much for the U.S. biotech company
and are not convinced it is the best fit, bankers have told
Reuters. [ID:nN25133182]

L’Oreal CEO Agon declined to comment on Genzyme on Thursday.

Shares in L’Oreal rose more than 5 percent to a two-week
high, the leading gainers on France’s CAC 40 index (.FCHI: ),
after demand for its cosmetics, a rise in consumer spending and
cost cuts helped it beat profit forecasts for the first half.

The company, which sells Garnier shampoo and Vichy facial
creams, expects to outperform the global cosmetics market this
year, Agon said, adding that the market would grow around 4
percent in 2011.

“A lot of people thought the market would collapse … But
cosmetics consumption has held up pretty well. People are not
willing to give up cosmetics,” he said.

New markets, such as in Africa and Asia saw 9.5 percent
growth in the first half, L’Oreal said.

The CEO added that the U.S. mass market was flat and that
“there is still no real economic recovery at the moment in the
United States”.

L’Oreal said late on Wednesday an improvement in
manufacturing costs, inventory and distribution cost reduction,
and a higher portion of sales of more expensive products helped
to lift profit.

It reiterated that it was confident about the second half,
though it gave no full-year forecasts.
($1=.7874 Euro)
(Writing by James Regan; Editing by Jon Loades-Carter)

UPDATE 1-L’Oreal happy with Sanofi stake, not with price