Avon considers Coty’s $10.7bn sweetened bid
AVON said last night it is considering Coty’s $10.7bn (£6.66bn) takeover bid and expects to respond to the smaller firm’s advances within a week.
Coty last week raised its offer from an earlier $10bn bid and gave Avon a deadline of the close of business today to enter into talks or it would withdraw its offer.
In a letter to the board, disclosed by Avon on Thursday, Coty raised its bid for Avon to $24.75 per share from $23.25, and revealed for the first time that Warren Buffett’s Berkshire Hathaway would provide some financing.
Coty, maker of Stetson aftershave and Beyoncé fragrances, in April made its intentions toward Avon public for the first time at $23.25 per share. Avon is nearly three times Coty’s size in revenue. Coty’s initial bid in March was $22.25 per share.
Avon had rejected all prior offers from Coty, saying the company’s value could rise under a new chief executive rather than as part of Coty.
Avon’s board did not reject the latest offer outright and said in a statement it would consider Coty’s latest bid “in due course”.
A number of shareholders have previously said Coty’s bid was insufficient but wanted Avon to at least talk with Coty.
Avon, the world’s largest direct seller of cosmetics, last month named former Johnson & Johnson executive Sheri McCoy as its new leader. In addition to declining sales at home and a loss of sales representatives, Avon faces a US probe into overseas bribery allegations.
Last week, Avon reported weak first-quarter results, including a sharp drop in profits. Avon has said it will conduct a thorough business review this year.
Avon shares on Friday closed at $20.19, or 18 per cent less than Coty’s latest offer.