Nestle's stake was worth 23 billion euros ($27.6 billion) before Friday's share price rise.
Questions over Nestle's investment in L'Oreal have intensified since June when activist shareholder Third Point disclosed a holding in Nestle and urged the Swiss group to dispose of an investment which is worth more than 10 percent of its own market value.
Nestle has long said the stake was strategic and financial and its thinking has not changed, according to a source familiar with the matter.
Nestle conveyed its condolences to the Bettencourt family on Friday. Beyond that, a spokeswoman said: "This is not the right time to make any further comment."
L'Oreal could not be reached for comment.
Tangled Takeover Talk
Over the years there has been speculation that Nestle might try to acquire L'Oreal outright, but that view is less common now that Nestle reduced its stake from 31 percent in 2014 and loosened the companies' ties by taking over the Galderma dermatology joint venture they shared.
What is more, Nestle has pivoted toward nutrition and health while L'Oreal is focused on beauty products.
"We think a disposal in the medium/long-term is more likely than a takeover," said analysts at UBS.
Nestle's new chief executive Mark Schneider, who began his role at the turn of the year, will lay out his strategy next week at an investor meeting in London.