She, best investor Fran?oise Bettencourt Meyers

"Fran?oise Bettencourt Meyers is the richest woman in France and the 12th richest woman in the world. The mother of L'Oreal heiress Liliane Bettencourt, she inherited a stake in the world's largest beauty company when her mother died in 2007. Today, with an estimated fortune worth $39.7 billion, she is the principal shareholder of LVMH (owner of Louis Vuitton, Dior, and many other luxury brands) and holds large stakes in German insurance giant Allianz SE."?

"The daughter of Jean-Charles Meyers, founder of a chain of Paris drugstores, she became involved in LVMH in the early 1970s. She married Francois Richard, the heir to a pharmaceutical company, and later sold her stake in 1980. They divorced in 1991 but remarried in 1993."

"Bettencourt spent decades pushing through increasingly unpopular investments. The L'Oreal heiress amassed a fortune by aggressively shifting billions of dollars into blue chip companies such as Louis Vuitton and then selling them off just before they doubled or tripled their value. That's how she got rich. But at the same time, she made some of the worst investments ever seen in Europe and forced herself into a position where she had to liquidate much of her holding in L'Oreal. Bettencourt was known to have owned a stake in LVMH—bought at a time when Bernard Arnault was looking for minority investors—although it is unclear whether she still holds that stake. She also bought Allianz SE, Germany's largest insurer, which recently put up a dismal performance led by disappointing sales from its Asian life insurance unit. Bettencourt increased her stake in Allianz to more than 10% in 2007, when she was estimated by the Wall Street Journal to be LVMH's second-largest shareholder. But she may now have little choice but to sell down much of that holding—as well as stakes in luxury brands like Louis Vuitton—to meet the terms of a deal struck between her and France's Bettencourt Meyers, who owns a minority stake in L'Oreal. In 2002, she was ranked France's wealthiest woman and she had been the third-richest for most of the previous three decades."

"And yet by 2007, she needed help. Bettencourt's fortune had fallen to $18.5 billion after a 40% drop in the value of shares in L'Oreal, which has its headquarters in Paris. Bettencourt's own fortune was helped by a boost from the sale in 2002 of her 6.2% stake in LVMH to Arnault, then Europe's richest man and now France's richest person."

"Bettencourt hoped to insulate herself from her declining holdings by selling them off just before they caught fire."

"In 2008, Bettencourt announced that she had agreed to sell L'Oreal. Those talks stalled when Bettencourt's financial advisers demanded more than $10 billion—more than the cosmetics maker was worth at the time."

"Bettencourt's top adviser, Gerard Mestrallet, was looking to slim down France's richest woman by selling off a chunk of her holdings in L'Oreal. With no other buyers, he wanted to be sure he had enough cash on hand to pay off investors—one reason Bettencourt is so tight-fisted with her money. He began talks with potential buyers and decided in early 2009 that Allianz would be a suitable match. But that wasn't the only reason. Mestrallet, who is a lawyer, had long been Bettencourt's asset manager. His fee for managing her main investments is estimated to be about $500 million each year."

"Two years ago, Allianz CEO Klaus Tschira suggested that the company might buy Bettencourt's 9.86% stake in L'Oreal—a go-between who would have handled the transaction and then passed information to both parties. The deal never materialized but it gave Allianz some ammunition as it pursued another potential buyer of Bettencourt's stake and when negotiations began between Bettencourt and Mestrallet. They agreed on a price."?

"Bettencourt's advisers felt it was important to get a deal done close to the end of the year, so they tore into L'Oreal shareholder meetings in November 2009 and again in March 2010. The advisors said L'Oreal's directors needed to push through a change in the company's bylaws, which would allow them to pay out any cash dividends that exceeded 5% of its earnings. The advisory team said that if Bettencourt didn't agree, there was no point in holding shareholder meetings and the process would drag on through summer. The board, which was also pushing for a quick deal, agreed to the terms. The deal was finalized in March."

"Bettencourt's 4% stake in L'Oreal was now worth roughly $11 billion. The deal closed on June 12, 2010, and it was a bargain for her. On the last trading day of May 2010, just before the deal with Allianz went through, Bettencourt's 5.5% stake in LVMH sold for about $13 billion. And just after the sale of her L'Oreal stake, Bettencourt was worth an estimated $15 billion. All three of these deals are now part of LVMH's asset-securities portfolio. And that makes Ms. Bettencourt the company's largest shareholder with an estimated net worth of $34 billion."?

"Bettencourt's advisers said one reason they chose Allianz was that it had a history with her: Ms. Bettencourt had been a client when it owned a minority stake in L'Oreal. The advisers also said the deal could help to reinforce the formidable position Allianz had established in its international insurance market, where Ms. Bettencourt had long had a stake. Allianz has also said it expects the deal will help it extend its reach in the luxury market."?

"And then there is the price. The deal valued Bettencourt's 4% stake in L'Oreal at about $13 billion, or about €10.50 a share. That's less than half of what she would have gotten if she had sold her shares when LVMH bought out her interest in L'Oreal in 2002. And that explains why Allianz paid such a high price."

"It was a quick trip around the historical table for Ms. Bettencourt: Her own wealth has swelled by about $11 billion in less than two years. And now she's worth a reported $34 billion."

"She's sold off her stake in L'Oreal, making her the company's biggest shareholder and thanks to some strategic investments, she also owns nearly 10% of Allianz. That almost doubles the size of her holding in LVMH, which holds stakes in Gucci, Mo?t & Chandon, and Louis Vuitton."

"As for L'Oreal, an economic downturn—and perhaps some bad news about its recent performance—could send its shares tumbling again. And the company's stock is still a long way off from the $26 high it reached in 2007. If L'Oreal's shares tumble, Ms. Bettencourt could get some of her money back."

"And if she does, she might use that cash to buy back shares in LVMH and try to catch up with her old friend Arnault."

"Last year, Arnault resigned from his position as a government economic adviser, but he has also remained a divisive figure in French politics. In 2004, he called for France to reconsider its tax laws on wealth—a proposal that would have meant drastic changes for him and others like him. But he was taken aback by a tough reaction from the public—and the government quickly moved to squelch the idea."

"The controversy generated a surge of interest in new President Nicolas Sarkozy. The president's approval rating surged from 52% to 72%, and that boosted support for his conservative party, which won control of parliament the following month. Bettencourt, meanwhile, stayed on the sidelines."?

"She is still French by birth. But for now, she is more German than French. Her fortune is swelled by her ties with Allianz and LVMH. And all three companies are based in France's main economic rival, where taxes are lower and where she might decide to move someday. A dollop of her money is also spread in the U.S. Her holdings in Allianz, LVMH, and L'Oreal are worth a combined $17 billion."

"PARIS—L'Oréal heiress Liliane Bettencourt has paid $1.3 billion in taxes on her stake in the beauty giant, including a 20% penalty for not declaring her €22-billion fortune to French authorities on time. The transactions were made as part of a complex deal involving L'Oréal and a private-equity group, Bain Capital, that resulted in a billion-euro tax bill for the Frenchwoman."

"The Bettencourt affair took another twist in April 2011 when the former treasurer of her political party was charged with handling funds unlawfully. Jean-Marie Boivin is accused of receiving €20 million from the heiress' close friend, Fran?ois-Marie Banier. He has denied any wrongdoing."

"Ms Bettencourt held 41 per cent of L'Oréal's stock. Under the terms of the agreement, she is entitled to 15 percent of the voting power in a special class of bonds issued by L'Oréal. The remaining 10 percent will be used to buy shares from Mr. Arnault."

"One thing is certain: France isn't too happy with how she has used her wealth. In 2002, she was involved in an advisory committee on tax issues for Nicolas Sarkozy's government. He was then France's finance minister and it was said he reaped a windfall when Ms. Bettencourt sold her L'Oreal stake for €23 billion in 2005. LVMH later paid €13 billion for her minority stake in L'Oreal. She has also been a member of the French delegation to the group of private-equity managers at the World Economic Forum in Davos, Switzerland."

"The tax she paid last year on her stake in L'Oréal is certainly small compared with her vast fortune. But it's unlikely to make much difference to her net worth. Indeed, it appears she is still sitting in a healthy position in Allianz, the German insurer. Bettencourt's holdings are worth about €10 billion and she has another €8 billion invested in a range of other assets. She also made about €4 billion from selling some Aventis shares when it merged with Sanofi-Aventis, another pharmaceutical company. And she has more than €8 billion invested in real estate projects in France, Israel, and the UAE."

"Ms. Bettencourt's holdings in Allianz are worth about €10 billion and she has another €8 billion invested in a range of other assets. She also made about €4 billion from selling some Aventis shares when it merged with Sanofi-Aventis, another pharmaceutical company. And she has more than €8 billion invested in real estate projects in France, Israel, and the UAE."?

"Bettencourt is considered to be one of the wealthiest women in Europe, but her love for expensive jewelry makes her also one of its most careless spenders. She hasn't valued any of the jewelry since 2008, according to L'Oréal, which means she could have lost a fortune on her $240,000 La Cornue stove. Or it could mean that she got a fantastic deal on the price. The company did not respond to requests for comment."

"The staggering purchase of the luxury stove dates back to 1998 when Bettencourt purchased a mansion in Neuilly-sur-Seine with her third husband André Bettencourt. The couple bought the house from actress Nicole Garcia for €6 million and L'Oréal later renovated it, adding more than €10 million worth of precious art, sculptures, and furniture. The whimsical, but the expensive purchase was bettered when Bettencourt bought a $250,000 La Cornue stove in 2002. The lavish purchase is perhaps the most extravagant since her love of fine jewelry. Other purchases include a $3 million wine cellar and over €6 million worth of art."

"Ms. Bettencourt's summer home in Mortefontaine-du-Breil—a village outside the city of Versailles—is also said to be worth more than €10 million. This year, she spent more than €1 million on her London home, which has a view of Hyde Park and is valued at almost €6 million. Her Neuilly mansion is also said to be worth €6 million."

"Liliane Bettencourt's mansion in Versailles has been sold for a record price — €20 million ($27.8 million), according to the menuiseries Hermès auction house that handled the sale, which included works of art by master artists including Picasso and Matisse. The home, located in the village of Mortefontaine-du-Breil, was valued at €12 million."

"Her mansion on Rue de Tivoli worth €19 million was also sold out at the auction, which brought in a total of €86.5 million."

"Liliane Bettencourt gave her father and various charities generously over the years. When she died last year, she left more than €2 billion to charities as well as to her children and other relatives. But her donations attracted scrutiny from French tax authorities who said that Ms. Bettencourt's donations were much higher than they should have been. In the end, a compromise was reached in which Bettencourt's children agreed to pay €300 million in taxes."

"Ms. Bettencourt's donations have included an art foundation to promote young artists, a children's hospital, and even payments for private school for the children of Stéphane Courbit, a former L'Oréal executive who was convicted of insider trading. The largest private donation was made to the Pasteur Institute to fund research into memory and Alzheimer's disease."

"Her son Jean-Victor is chairman of both the Fondation de France charity and BFX Bank, which does business in Africa. Jean-Victor and his wife, Ségolène, are L'Oréal's largest shareholders and have personal fortunes worth €2 billion. A second son, Pierre-Olivier, is an executive at the company."

"The foundation started in 1945 as a small donation of brandy from Mr. Bettencourt. The foundation now owns the domain name lorf.org and offers a full range of gifts to individuals and organizations including publications, real estate, fine arts, and more."

"Mr. Bettencourt died on Wednesday at his home in Paris shortly after noon following a long illness at the age of 84. On Thursday, he was buried at a private ceremony in Limoges, in the central region of France."

"Born to a family of aspiring industrialists in Limoges on Sept. 29, 1932, Mr. Bettencourt was forced at an early age to help his parents run their business which employed 500 people. They owned a small factory that manufactured door knobs and locks and which got its start under the watchful eye of young Victor. He spent his teen years working on the factory floor before graduating from university in Paris with honors in law and philosophy."

"He said that as a teenager he had always felt separated from his father who rarely showed any emotion other than anger. His mother was a strong woman whom he adored and who encouraged him to go to Paris to study. But tragedy struck shortly after his graduation in 1954 when his father died of cancer at the age of 51. Mr. Bettencourt took over the family business which was struggling in a changing market."

"Over the years, Mr. Bettencourt turned the lock maker into one of the best-known brands in France and one of Europe's largest suppliers of hardware, stretching into automobile accessories and even linens."

"Mr. Bettencourt was married three times and had four children. His first marriage was to Francoise Meyers in 1954 whom he later divorced in 1972. In 1974, he married Liliane Weiller with whom he had one daughter, Fran?oise-Marie, and one son Jean-Pierre, who is the chairman of L'Oréal."

"Mr. Bettencourt's third wife was Liliane Bettencourt née Schueller, the daughter of Eugene Schueller, founder of L'Oréal. Mr. Schueller died in a car crash on a Paris street in 1957 and his widow took over the company becoming a major shareholder."

"At the time of his death, Mr. Bettencourt was survived by his wife and four children, nine grandchildren, and five great-grandchildren. His only son is heir to the L'Oréal fortune."

"Mr. Bettencourt's donations have included an art foundation to promote young artists, a children's hospital, and even payments for private school for the children of Stéphane Courbit, a former L'Oréal executive who was convicted of insider trading. The largest private donation was made to the Pasteur Institute which funds research into memory and Alzheimer's disease."

"Mr. Bettencourt also made a large donation to New York City Opera in 2008 when it had financial difficulties. He also made a $1 million donation to the Metropolitan Opera in New York in 2009 to help fund a revival of "A?da"."

"When he was 12 years old, Mr. Bettencourt had an operation that cost his right eye. To this day, he only has 10 percent vision in it and wore glasses with dark lenses that hid his empty eye socket."

"Mr. Bettencourt came from a family of entrepreneurs in Limoges, also known as the wool capital of France, but he chose to become a banker instead of joining L'Oréal. He said he learned about business by working for his mother who ran a company that manufactured door knobs and locks."

"Mr. Bettencourt was also a key player in the creation of the European Association of Locksmiths. Over the years, Mr. Bettencourt extended his interests beyond hardware to include automobiles, food service, and chemicals."

"He was also an avid sailor and enjoyed yachting with Ms. Bettencourt in the Mediterranean and Atlantic oceans. He owned two vessels: one for competitive races called Formule Loulou, which won its division several times; and a second boat called Grain de Folie which he used for pleasure cruises with his family around Corsica. He also had a racing yacht called Chahut, which he used to race in the Whitbread sailing race from England to La Rochelle."

"Mr. Bettencourt was active in the Lock and Hardware Manufacturers Association and became its president in 1976. He also became a member of the Canadian Cardiovascular Society, the International Olympic Committee, and Royal Automobile Club of Belgium."

"An avid philatelist, Mr. Bettencourt was an admirer of Leonardo da Vinci's Mona Lisa. She was painted by da Vinci as a gift for King Francis I of France but it has never been definitively determined where or when it was painted."

"When he died Mr. Bettencourt was survived by two sons and three grandchildren. He left behind a fortune of EUR 2 billion (USD 2.6 billion) in the L'Oréal empire, according to Forbes magazine."

"Mr. Bettencourt had no formal engineering training but it didn't stop him from becoming a successful businessman. During his early years as an apprentice in his father's factory, he learned all aspects of the business by working on the factory floor, later studying law and philosophy at the Sorbonne."

"After taking over the family business in 1954, which was suffering badly following World War II, he took steps to halt its decline and propelled it into a modern-day leader in hardware supplies. He also began to diversify into other businesses, including car parts and cosmetics."

"The company was sold to the French cosmetics giant L'Oréal in 1999. Mr. Bettencourt died a few weeks later. He had been stricken by a brain hemorrhage on Dec. 2, after returning from a business trip to New York where he bought back shares of L'Oréal that his son-in-law Fran?ois-Henri Pinault had sold during the credit crunch."

"He was 74 when he died, half the age at which his father died in 1954. Mr. Bettencourt had invested heavily in L'Oréal and it has continued to be a success ever since. He had no interest in politics but was a generous philanthropist. He donated millions to help destitute children in Iraq, some gypsies in Romania, and many other projects for various causes."

"In his business dealings, he was known as a tough negotiator and liked to travel with his wife Liliane aboard the Formule Loulou to visit factories around the Mediterranean, making deals and haggling with managers. Their travels helped them meet clients from Italy, Greece, Turkey, and Morocco."

"When Mr. Schueller died in 1957, L'Oréal became a family business with the widow Mrs. Schueller at the helm for more than four decades before her son took over. All the family's political affiliations were kept within the family. Fran?ois-Henri Pinault, who holds a 20 per cent stake in L'Oréal, is Mr Bettencourt's son-in-law and Liliane Bettencourt Schueller, his daughter was married to Pierre Pinault, whose own father eventually became chairman of L'Oréal."

"Mr. Bettencourt made a large donation to the Pasteur Institute which funds research into memory and Alzheimer's disease. He also donated a large sum to fund the restoration of Notre Dame Cathedral. He also made a donation to New York City Opera when it was in financial difficulties. As well as funding a revival of "A?da", he gave $1 million so the Metropolitan Opera could continue to perform the work."

"Mr. Bettencourt had his first major stroke in 2004, requiring treatment on both sides of his brain and leaving him partially blind in one eye."

"Mr. Bettencourt was a founding member of the World Economic Forum, which is also known as Davos. He was also involved with other charitable organizations, including American L'Oréal, which aims to help improve the social and economic conditions of women in developing countries. That organization is chaired by the former secretary general of the UN, former US Secretary of State Madeleine K. Albright."

"Mr. Bettencourt was also a co-founder with former Austrian Chancellor Alfred Gusenbauer and Israel's Ehud Barak of the European Union-Middle East Peace Dialogue, another group that brings together politicians, business people, academics, and religious leaders to discuss peace issues in the Middle East. Mr. Bettencourt was also a member of several advisory boards for science and technology."

"Among his hobbies were collecting antique clocks and watches and playing tennis with his wife Liliane. He also took an active interest in Formula One auto racing by watching the sport from his living room in Paris.