Coty has been trying to court Avon for the last 2 months to try to buy the troubled direct seller – but they abandoned their bid on Monday. So what now?
Investors seem to be taking this seriously and sent Avon’s shares sliding 9.7 percent to close at $18.71 on the New York Stock Exchange on Tuesday. Avon’s declining stock price could prompt another bidder to make an offer for the company.
Industry observers speculate that Coty may make another public offering soon, and look for another beauty firm to buy. Coty chairman Bart Becht said Avon’s presence in emerging markets is what made it so attractive to Coty. Meanwhile Avon’s refusal to engage in talks with Coty over the last several months has left some industry analyst in disbelief. On May 10, following Coty’s sweetened bid of $24.75 a share, or $10.65 billion, Avon said its board “will consider the letter in due course.”
Today, Avon staffers were on the phone calling representatives to instill confidence in the company.
According to WWD, Becht wrote a letter that expressed Coty’s frustration with Avon’s response stating, “Yesterday, we received a two sentence e-mail indicating, without explanation, that Avon’s board would need another week to consider our request. Since receiving your e-mail, we have reached out to Avon’s board, management and advisers to understand why additional time is needed, but we have received no explanation. I find it remarkable that since we made our revised proposal, and despite repeated requests over the last 24 hours, no one from Avon’s board or management has been willing to speak with us, including Fred Hassan, Andrea Jung and Sheri McCoy.”
It will be interesting to see what Coty does next and if anyone else has any interest in acquiring Avon.
– Carol Calacci
Source: WWD, Images: Coty and AvonSee the Top Ten Summer 2016 Trends for Women Over 40