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L'Oreal SA (LRLCY) shares hit an all-time high in the opening hour of trading Monday, after activist investor Third Point called for Nestle SA (NSRGY) to sell its majority stake in the company.

L'Oreal shares were up 4.09% to €195.65 in Paris at 9:54 Paris time, extending a three-month gain of 8.83% and hitting its highest-ever valutation.

The surge comes as Dan Loeb's Third Point LLC revealed a 1.3% stake in Nestle, making it a top 10 investor in the world's biggest food company. Third Point called for Nestle to shed assets and increase share buybacks, including for it to monetize its L'Oreal stake.

Nestle acquired a 29% stake in L'Oreal in 1974, it sold 6% in 2014, leaving a 23% stake worth more than $25 billion or roughly 10% of Nestle's market capitalization, Third Point said.

"However, having L'Oreal in the portfolio is not strategic and shareholders should be free to choose whether they want to invest in Nestle or some combination of Nestle and L'Oreal," the investor said. "Current conditions make this the right time to exit the remainder and we believe the stake can be monetized with limited tax or other consequences."

Third Point said the L'Oreal stake could be divested through an exchange offer for Nestle shares "that would accelerate efforts to optimize its capital return 7 policies, immediately enhance the company's return on equity, and meaningfully increase its share value in the long run as earnings improve over a reduced share count."

In February, Nestle CEO Mark Schneider said the stake was a significant and strategic asset and any change would have to be done very carefully.

"L'Oreal is a significant investment and anything you do on the equity would have to be done very prudently," Mark Schneider told reporters at the time, adding L'Oreal had delivered "stellar results."