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Thursday, 7 June, 2001, 08:48 GMT 09:48 UK
Body Shop in takeover talks
A Body Shop store
Body Shop has 310 UK stores
UK-based ethical cosmetics retailer Body Shop has confirmed it has been approached about a possible takeover.

The potential bidder is believed to be Mexican company Grupo Omnilife, which is thought to have offered about 350m for the business.

The company has reached a preliminary agreement to acquire Body Shop International PLC for about $500m, according to the Wall Street Journal Europe.

The deal, however, isn't final and depends in part upon the ability of privately-owned Omnilife to borrow about $250m for the purchase, sources said.

Shares up

Body Shop shares were up by almost a quarter on news of the possible deal, gaining 18p at 125p a share.

The company has been linked with a possible take-over by cosmetics firm Lush in the past.

According to the Wall Street Journal, Omnilife is a fast-growing seller of direct-to-consumer nutritional supplements

In an interview with the Journal on Wednesday, Omnilife founder Jorge Vergara Madrigal declined to discuss the deal.

Body Shop stores, by location
UK and Ireland 310
Americas 415
Europe & Middle East 684
Asia Pacific 431
Total 1,840
"Regulators in England are very strict and I can't say anything," he said.

"We may have something on Monday or Tuesday."

Steve McIvor, a spokesman for Body Shop, said the company "is in very preliminary discussions with a third party and will be making a short announcement on Thursday morning."

He declined to comment further.

The Body Shop announced in London that it has received an approach from a third party which may or may not lead to an offer being made for the company.

"Discussions are at a very preliminary stage, and there can be no assurance that an agreement will be reached," it said.

The Body Shop has 1,840 stores worldwide, of which 477 are company-owned.

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