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Last Updated: Sunday, 10 July, 2005, 11:43 GMT 12:43 UK
Japan's Kao eyes up Molton Brown
Molton Brown bath gels
Molton Brown products are sold in the world's top department stores
British luxury goods company Molton Brown is in talks that could see it bought by Japanese cosmetics firm Kao.

Molton, founded as a hair salon in 1973, has become one of the UK's leading upmarket cosmetic firms, specialising in skin-care products.

Kao, whose products range from nappies to laundry detergent, confirmed it was in talks with Molton about a deal.

Analysts said the deal could value Molton Brown - which has operations in six countries - at up to 170m ($300m).

Retail growth

"Kao can confirm that the company is in negotiations with Molton Brown regarding a potential acquisition," the Japanese company said.

Molton Brown is currently controlled by private equity firm Bridgepoint, which bought a majority stake in the business in 2003.

The firm's management, headed by chief executive Charles Denton, owns roughly 30% of the business.

Molton's products - such as shampoo, bath gels and skin creams - are sold in many of the world's most exclusive department stores such as Selfridges and Harvey Nichols.

The company has developed its own retail network, setting up "emporiums" in London and across the UK.

It has also started selling leather goods and homeware while creating beauty spas in travel points such as airport lounges.

The firm, whose main laboratory is in Hertfordshire, made sales of 45m last year.

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