SAO PAULO (Reuters) -Brazilian cosmetic maker Natura & Co on Monday said it has agreed to enter into exclusive talks with private investor Aurelius Group for a potential sale of its subsidiary The Body Shop (TBS), lifting its Sao Paulo-traded shares.

The move comes after Natura announced in August that its board of directors had authorized it to search for "strategic alternatives" for TBS, including a potential sale of the business, six years after buying it from L'Oreal.

Shares of the Brazilian firm rose more than 2% on the news, which also follows a deal earlier this year to sell its luxury brand Aesop to L'Oreal at an enterprise value of $2.53 billion as part of a broader organizational shakeup.

Natura in a securities filing said the terms and conditions of the potential sale of TBS were under negotiation and there was still no assurance the transaction would be completed.

JPMorgan analysts, however, said a deal was likely to be announced soon, mentioning Natura's move to streamline its operations while seeing TBS as a noncore asset, given its higher focus on Latin America and its core relationship-sales mode.

"Upon the potential materialization of this deal and the company's net cash position post Aesop sale, we believe that the proceeds for the transaction that are unlikely to be subject to capital gains should be distributed as extraordinary dividend," added the analysts led by Joseph Giordano.

Reuters reported on Sunday, citing a source, that Aurelius was in talks to buy the beauty products chain from Natura.

If completed, the deal is expected to value TBS at a lower price than the 400 million-500 million pounds ($485.20 million-$606.50 million) suggested in some media reports, according to that source.

(Reporting by Gabriel Araujo; Editing by Steven Grattan and Mark Porter)