As Summer Heats Up, So Does the Rumor Mill

P&G said to be eyeing Shiseido and Estée Lauder.

The dog days of summer are approaching, and that has analysts sniffing around for potential deals. In a note to investors Monday, analyst Ali Dibadj of Sanford C. Bernstein & Co. said that Alberto-Culver and Kao are among a dozen companies worth less than $10 billion that would offer characteristics suitable for Procter & Gamble.

Other potential targets for P&G include Shiseido and Estée Lauder. Both are possible acquisition targets if P&G wants to add more beauty products and increase penetration in emerging markets. Mr. Dibadj noted that beauty categories generally offer higher rates of normalized growth and operating margins. He said emerging markets also provide a higher-than-average normalized growth rate for companies like P&G.

Of course, rumors like these swirl around every year, and most never get beyond the rumor stage. But with the economy in turmoil and most marketers still in a defensive position, such a move by P&G would truly be a bold acquisition.