Sanofi Likely To Repurchase 9% Stake Of L'Oreal

(RTTNews) - Media reports released late Friday said French drugmaker Sanofi (SNYNF, SNY), hinted that it would be a sensible move to repurchase 9 percent stake of L'Oreal SA(LRLCY.PK), if the cosmetics giant put their $12 billion holding for sale.

Chris Viehbacher, CEO of Sanofi told in an investor conference that they had the resources to do opportunistic share buybacks, and also to make bolt-on acquisitions, which would likely increase its stake in US based biotechonology firm, Regeneron Pharmaceuticals(REGN).

There is a possibility that the decision of L'Oreal's stake in Sanofi has been fueled by last month's comments from the Chief Executive Officer of L'Oreal, that it could repurchase the $30 billion stake Nestle holds in it, if the French cosmetic giant in turn sold the 9 billion euro stake it owns in Sanofi. Restrictions on Nestle selling its L'Oreal stake end in April, 2014.

Though these speculations and low quarterly results have heavily hurt the shares of Sanofi, it is reportedly told that some analysts' point of view is that the drugmaker could use the opportunity to buyback shares with cheap debt, which would shoot up its earnings.

Sanofi's CEO said it was difficult to comment about buying back L'Oreal's stake from next year, as it was highly conditional. "We certainly have cash flow to do some things," he added at a healthcare conference in London.

Also, Sanofi is looking at raising its stake in Regeneron to as much as 30 percent, under its 10 year long partnership with Regeneron. Sanofi already holds about 16 percent of Regeneron, which has a market value of about $27 billion.

Separately, as reported by Bloomberg, a drug maker that specializes in rare diseases, ViroPharma Inc(VPHM), has attracted interest from Sanofi SA and Shire PLC(SHP.L, SHPG).

People close to the matter, ViroPharma began working with Goldman Sachs Group Inc. on a possible auction after fielding an unsolicited approach.

After the reports,ViroPharma's shares spiked up, and finished Friday's trading with a gain of $8.66 at $39.13 on the highest volume of the year. However, Shire's shares closed 0.32 percent down at 2,477 GBP. Sanofi, Friday closed at $47.96 on the NYSE.

Regeneron's shares closed 5.98 percent up at $289.97 on the Nasdaq. However, after trading hours, it closed 0.04 percent down at $289.85.

L'Oreal closed Friday's trading 0.05 percent up at $33.11 on OTC markets.