Coty Boosts Avon Bid To About $10.7B
NEW YORK (AP) -- Beauty products maker Coty Inc. is raising its buyout offer for direct-seller Avon Products Inc. by about 6.5 percent to almost $10.7 billion.
Avon, whose brands include Skin-So-Soft, Anew and mark, said Thursday that Coty told it in a letter that it was raising its offer to $24.75 per share from $23.25 per share.
The revised bid is a 15 percent premium to Avon's Wednesday closing price of $21.60. Avon shares rose 1.3 percent to $21.87 in premarket trading Thursday.
Avon had rejected Coty's $10 billion offer last month, but Coty has remained interested. It said in the letter to Avon that it wants to look at Avon's books to confirm estimates and learn more about Avon's ongoing bribery investigation and litigation.
Coty says it will withdraw its latest bid if it doesn't receive a response by the close of business Monday.
Coty's letter indicated Avon has said it is not interested in reviewing any proposal until after newly installed CEO Sherilyn McCoy has completed a review of all of Avon's business operations.
On Thursday, Avon said its board will consider Coty's letter in due course.
Founded in 1886, Avon became a fixture in households across the country as its legions of "Avon ladies" went door to door selling makeup to family, friends and acquaintances.
Now, Avon is in transition. McCoy, a long-time Johnson & Johnson executive, has been in place less than a month. She replaced CEO Andrea Jung, who had come under fire for failing to stem the company's declines and wrap up the bribery investigation, which started in China in 2008 and has spread to other countries.
The company's profit has shrunk over the past three years. It has frequently missed analysts' earnings expectations and posted weak sales in some of its largest markets, including Brazil and Russia. Avon said last week that its first-quarter net income fell 82 percent, hurt by a bigger restructuring charge and higher commodity and labor costs.
Rumors of other possible bids for the New York company have been swirling. A media report last week said private equity firm Richmont Holdings is structuring an offer for Avon, but so far nothing has materialized.
Coty is controlled by German holding company Joh. A. Benckiser GmbH, which also operates consumer products company Reckitt Benckiser Group PLC. Reckitt's brands include Air Wick air freshener and Clearasil skin care products. Benckiser is one of Coty's financing sources, along with BOT Capital Partners and Berkshire Hathaway Inc.