Alberto-Culver may be on P&G's takeover target list

Estee Lauder Cos., Shiseido Co. and Alberto-Culver Co. are potential takeover targets for Procter & Gamble Co. as the world's biggest consumer products maker expands in beauty products and emerging markets, Sanford C. Bernstein & Co. said.

Estee Lauder, the New York-based maker of Clinique cosmetics, Shiseido, the Tokyo-based cosmetics maker, and Alberto-Culver, the Melrose Park-based maker of TRESemme and Nexxus hair-care products, are among companies worth less than $10 billion that would meet P&G's objectives, analyst Ali Dibadj wrote.

"Beauty categories generally offer higher rates of normalized growth" and higher operating margins, the analyst wrote in a note today. "Emerging markets are also important in that they offer a higher-than average normalized growth rate for companies like P&G.'

Estee Lauder rose 3.3 percent in New York Stock Exchange composite trading at 11:49 a.m. Shiseido gained 0.1 percent to $15.80. Alberto-Culver advanced 0.2 percent to $24.91. P&G rose 1.6 percent to $53.04.

Other likely targets that offer more beauty products and penetration of emerging markets include Amorepacific Corp., Beiersdorf AG, Dabur India Ltd., Godrej Consumer Products Ltd., Kao Corp., Kose Corp., Lion Corp., Marico Ltd. and Shanghai Jahwa United Co., the New York-based analyst said.

Cincinnati-based P&G gets about 4 percent of sales from developing markets, according to Bloomberg data. Procter & Gamble, which bought Gillette Co. in 2005 for $57 billion, said last month that it would acquire male grooming brands Zirh and The Art of Shaving. Terms weren't disclosed.

Procter & Gamble has declined 8 percent since Dibadj cut his rating to "market perform" from "outperform" on Jan. 15.

Dibadj said he lowered the rating six months ago on concern that acquisitions "could threaten earnings stability and/or the company's execution against core business targets."

That risk is "higher today," he wrote.