L'Oreal and P&G mull Kanebo bid

- Last updated on GMT

Related tags: Cosmetics division, Procurement, Kanebo

Kanebo, the Japanese consumer and household goods company, looks
set to be rescued with rivals L'Oreal, P&G, Kao, Shiseido and
Kosé all trying to get in on the rescue bid to rehabilitate the
company, reports reports Simon Pitman.

L'Oreal​ said this week that it had received documents relating to the bidding process and was now joining the tender, while a further confirmation from P&G​ brought the total number of international and Japanese bidders to more than ten, a report in the Japanese Times confirmed.

Although Shiseido​ is currently Japan's biggest cosmetics company and L'Oreal is a major player on the global market, it is in fact Kao​ that it is considered to be the most serious bidder.

Kao has said that it has made no definitive decision on whether or not it will enter the bidding process. It originally tried to acquire Kanebo's cosmetics division last year, when it bid JPY400 billion (€2.95bn).

However, that bid was killed off, when Kanebo​ decided to turn to the IRCJ (Industrial Revitalisation Corp Japan) - a state-backed body that helps companies in financial difficulty to get back on their feet - to escape massive debts incurred following the revelation of an accounting scandal.

The eventual sale of the Kanebo group will mean that the cosmetics division looks likely to be split up from the main households group - a division that many of the current bidders are thought to be interested in.

Currently the IRCJ own a 51 per cent controlling stake in Kanebo and an 86 per cent stake in its cosmetics division. The body has invested JPY400 billion in Kanebo, but as the company starts to regain some of its financial stability the planned sale of the company is now moving ahead and is expected to be completed by the end of the week.

The IRCJ has refused to release the names of all the bidding parties, but says that several tenders are expected to follow the first one, which will be in September.

Kanebo admitted to inflating its profits to the tune of €2 billion over a five year period that ended in March 2003. The revelation came amidst a number of blue chip Japanese companies that admitted to similar accounting inaccuracies around the same time.

Related topics: Business & Financial

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