UPDATE 2-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 10 pct after results beat forecasts

* L’Oreal chief jokes over Sanofi’s share price

(Adds detail, background)

By Nina Sovich and James Regan

PARIS, Aug 26 (BestGrowthStock) – The head of L’Oreal (OREP.PA: ), a
big shareholder in French drugmaker Sanofi-Aventis (SASY.PA: ),
expressed discontent with Sanofi’s flagging share price on
Thursday, as it embarks on a multi-billion-dollar takeover.

Sanofi wants to buy Genzyme (GENZ.O: ), one of the world’s
biggest biotech companies and a leading maker of drugs for rare
diseases, sources familiar with the situation have said.

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

“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, eliciting
laughter from the crowd, after L’Oreal posted forecast-beating
results. [ID:nLDE67O1U8]

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

Agon said there were “no plans for the short term” for the 9
percent stake, which is worth about 5.3 billion euros ($6.7
billion), repeating that it was a financial investment and not a
strategic one. He would not comment directly on Genzyme.

Sanofi’s top two shareholders, L’Oreal and Total, will have
a key say in any acquisitions plans, with a strong presence on
the group’s board.

Of Sanofi’s 13 board members, one currently has a key
position at oil major Total, and one is a former employee.

L’Oreal is represented on the Sanofi board by two
executives, finance chief Christian Mulliez and former CEO and
current chairman Lindsay Owen-Jones.

L’Oreal and Total, which together own 15 percent of Sanofi,
are both looking to draw down their stakes, despite their strong
presence in the governance of the drug company.


Sanofi has offered to buy Genzyme 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
offer of $75 before it will even open its books to the company,
people familiar with the situation say.

L’Oreal shares rose as much as 10 percent to their highest
level in a month earlier on Thursday after 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 there
was “still no real economic recovery at the moment in the United

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 and Will

UPDATE 2-L’Oreal happy with Sanofi stake, not with price