LG Household & Healthcare says considers bid for Elizabeth Arden

SEOUL (Reuters) - LG Household & Healthcare said on Wednesday it is considering a bid for United States-based cosmetics company Elizabeth Arden, a move that would boost the South Korean firm's line-up in perfume and add a luxury brand.

Elizabeth Arden, which has a market value of US$845 million (S$1.1 billion), has like other cosmetics firms been hit by a broad slowdown in the North American beauty market that has hurt earnings.

Shares in LG Household, the No. 2 South Korean firm in the domestic market with brands Whoo and O Hui, climbed 3 per cent on the news of the potential bid.

LG Household has expanded its overseas operations in recent years through acquisitions in China and Japan and has said it would consider additional acquisitions to boost its existing operations.

LG Household has yet to decide on whether to make a formal bid for Elizabeth Arden, a spokeswoman for the company said, responding to a report in the Maeil Business Newspaper. She added that bidding for the company was one of several options but declined to elaborate further.

"Elizabeth Arden gets 78 per cent of its sales from perfume, which is a product area where local companies are weak," said Meritz Securities analyst Song Kwang-soo. "Acquiring Elizabeth Arden would also add a luxury brand to the lineup, which would be positive."

Elizabeth Arden's net income attributable to shareholders fell to US$34.95 million for the fiscal quarter that ended Dec 31, down from US$44.81 million a year earlier as sales in its key North America market slowed.

The US company's product lineup includes celebrity brand perfumes such as those of Taylor Swift and Justin Bieber, as well as skin care brands like Ceramide and Prevage.