Liliane Bettencourt, Heiress to L'Oréal Fortune, Dies -- 3rd Update
September 22 2017 - 7:04AM
Dow Jones News
By Matthew Dalton
PARIS -- Liliane Bettencourt -- who presided over the L'Oréal
cosmetics fortune, becoming the world's richest woman -- died on
Thursday after spending decades under the spotlight for her ties to
powerful politicians and her role in a bitter family feud. She was
94 years old.
"My mother has left peacefully," said Françoise
Bettencourt-Meyers, her daughter.
In announcing the death, Ms. Bettencourt-Meyers offered
assurances that L'Oréal SA, the world's biggest cosmetics company,
remained in steady hands with Chief Executive Jean-Paul Agon. Ms.
Bettencourt-Meyers controls 33% of L'Oréal along with her sons as
guardian of her mother's assets.
"In this painful moment for us, I would like to reiterate, on
behalf of our family, our entire commitment and loyalty to L'Oréal
and to renew my confidence in its President Jean-Paul Agon and his
teams world-wide."
Despite those assurances, investors bet on possible fresh
strategic opportunities now available to management at L'Oréal and
Nestlé SA, which owns 23% of L'Oréal. That ownership is the result
of a stake sale brokered by Ms. Bettencourt more than 40 years
ago.
Under an agreement between Nestlé and the Bettencourt family,
neither side is permitted to raise their stake in L'Oréal, though
they have been free to sell their shares to third parties. The
agreement expires six months after Ms. Bettencourt's death. U.S.
activist investor Dan Loeb, who earlier this year bought a big
stake in Nestlé, has pushed Nestlé to sell its L'Oréal shares.
"Speculation around the future ownership structure of [L'Oréal]
and [Nestlé's] intentions is now inevitable," said analysts at
Jefferies, though "it might just be that nothing changes, at least
for a good while."
L'Oréal shares were up more than 3% Friday. Nestlé shares were
0.74%.
In a statement, Nestlé said: "We express our most sincere
condolences and deepest sympathy to Mrs. Bettencourt's family and
to all at L'Oréal at this difficult moment. This is not the right
time to make any further comment."
Ms. Bettencourt amassed one of France's biggest fortunes while
overseeing L'Oreal's rise from a family makeup company to a
globe-spanning colossus. Forbes estimated her net worth at $45
billion.
Born Liliane Schueller in 1922 in Paris, she was the daughter of
Eugène Schueller, a chemist who founded L'Oréal. In 1950, she
married Andre Bettencourt, a journalist who had been a member of a
fascist youth group at the start of World War II but who then
joined the French resistance. Mr. Bettencourt went on to become a
politician, holding ministerial positions in multiple
governments.
Mr. Schueller didn't want his daughter to run L'Oréal. After his
death in 1957, Ms. Bettencourt largely followed his wishes, keeping
out of the day-to-day operations of the company.
However, she guided one of its more important transactions: the
1974 sale of a large stake in L'Oréal to the Swiss consumer-goods
giant Nestlé. Ms. Bettencourt orchestrated the move to fend off a
feared nationalization of L'Oréal by the French state.
Toward the end of her life, Ms. Bettencourt was best known
internationally for the Bettencourt affair: a family dispute over
her relationship with a male friend that broadened into a financial
scandal touching the inner circle of former French President
Nicolas Sarkozy.
Late in life, Ms. Bettencourt began lavishing money and gifts on
François-Marie Banier, 63, a socialite photographer and friend,
totaling more than EUR1 billion ($1.19 billion), according to a
lawsuit filed by Ms. Bettencourt-Meyers against Mr. Banier. Her
daughter accused Mr. Banier of exploiting her mother's mental
weakness and asked the court to name her as Ms. Bettencourt's
guardian. Mr. Banier denied any wrongdoing.
Ms. Bettencourt opposed her daughter's effort to place her under
guardianship, sparking a vicious legal battle between the two. In
2011, a court placed Ms. Bettencourt under the control of Ms.
Bettencourt-Meyers and her sons.Her legal team argued that she was
happy to be generous with Mr. Banier.
"If I am exploited, it's because I let myself be exploited," Ms.
Bettencourt said in 2010. "Good for me! Let me live."
During the trial, 21 hours of secret tape recordings made by Ms.
Bettencourt's butler came to light in which she and her financial
adviser, Patrice de Maistre, alluded to offshore accounts. The two
also discuss possible donations to Eric Woerth, who was Mr.
Sarkozy's labor minister.
In the recordings, Ms. Bettencourt seems confused and frail. At
various points in the recordings, Ms. Bettencourt doesn't recall
having made Mr. Banier the sole beneficiary of her estate,
excluding her stake in L'Oréal, which she already had given to her
daughter. Neither does she recall giving him a private tropical
island in the Seychelles.
On Thursday, French finance minister Bruno Le Maire praised Ms.
Bettencourt's time as the biggest shareholder of L'Oréal.
"She assured throughout her life stability in the shareholding
of one of France's main businesses," he said. "This stability
allowed L'Oréal to develop and become the world leader in the
cosmetics industry.
Write to Matthew Dalton at Matthew.Dalton@wsj.com
(END) Dow Jones Newswires
September 22, 2017 06:49 ET (10:49 GMT)
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