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LG Is Considering Bid For Elizabeth Arden

April 29, 2014

For a price that could reach nearly $1B.

Let the Big Deals begin. After a relatively quiet 2013, multinational household and personal product companies are flush with cash and ready to wheel and deal. Last week, the big South Korean cosmetics and electronics company, announced that it is considering a bid for Elizabeth Arden, as it looks to expand locally and overseas by buying rivals. On news of the potential deal, Elizabeth Arden's share price jumped 10%.

The Seoul-based company, which also makes household cleaning goods, is looking at “big deals” locally and overseas, including one for Elizabeth Arden, Lee In Ick, a spokesman for the LG Group unit, said by telephone today.

LG Household would become a global luxury beauty company with the Elizabeth Arden deal, which may be valued at more than 1 trillion won ($963 million) including goodwill, Maeil Business Newspaper reported, citing an investment bank official it didn’t identify. A deal that size would be the largest for LG Household, which spent about $34 million on three purchases last year and $485 million on four deals in 2012, according to data compiled by Bloomberg.

LG Household plans to ally with institutional investors in South Korea to initially take a controlling stake in Miramar, Florida-based Elizabeth Arden before buying out the remaining stakes, Maeil reported.

LG Household rose 3.1% to 495,000 won at the close in Seoul trading, reducing its decline this year to 9.7%. Elizabeth Arden has slumped 20% this year giving it a market value of $844 million.

The maker of Whoo Hwanyugo skin care products also sells perfumes, fabric deodorant, toothpaste and beverages, according to the company website. Elizabeth Arden makes celebrity-branded scents for names such as Justin Bieber and Britney Spears.

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