Struggling Avon rejects $10 billion takeover

Coty, a leading global beauty company, said Monday it has made an offer to buy struggling cosmetics company Avon Products in a deal valued at approximately $10 billion.

The offer, of $23.25 per share in cash, represents a premium of 20 percent over the closing level of Avon shares last Friday. Shares of Avon surged on the news in trading Monday.

For Subscribers

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

FOR SUBSCRIBERSCornell rape allegation spotlights stringent New York state laws that have long drawn criticism

FOR SUBSCRIBERSThe debate over AI’s future rages on both coasts

FOR SUBSCRIBERSDecades-old march dispute reignites in Northern Ireland, threatening political crisis

For Subscribers

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

FOR SUBSCRIBERSCornell rape allegation spotlights stringent New York state laws that have long drawn criticism

FOR SUBSCRIBERSThe debate over AI’s future rages on both coasts

FOR SUBSCRIBERSDecades-old march dispute reignites in Northern Ireland, threatening political crisis

Avon said Monday it has carefully considered the offer, but has rejected it, calling it “opportunistic” and “not in the best interest of Avon’s shareholders.”

Linda Bolton Weiser, an analyst at Caris & Company, told CNBC Monday the bid might end up being a positive for Avon, as it implies that the company’s direct-seller model of retailing is still relevant.

Coty said it decided to make the transaction public “in order to inform Avon's shareholders of the significant value in a transaction.” Coty added “it has no intention of pursuing an acquisition on a hostile basis.”

“Our objective is to engage in discussions with Avon and conduct due diligence so that we and Avon can together determine if there is a basis for a transaction,” Bart Becht, Chairman of the Board of Directors of Coty, said in a statement.

“We believe Avon’s shareholders would want their Board to explore with us the benefits to shareholders of a transaction,” Brecht said.

Becht detailed the details of the deal in a letter to Avon's board of directors.

Coty said it has held extensive discussions with its financing sources about obtaining the debt and equity financing necessary to complete the transaction, and is confident it will obtain the necessary financing for the transaction.

Known in the U.S. for its “Avon ladies,” who sell Avon’s products door to door and to friends and family, Avon has struggled in recent years, turning in poor performances in key markets such as Brazil and Russia.

The company has also suffered from a leadership vacuum.

Avon said late last year it has begun a search to replace chief executive Andrea Jung, who will remain as chairman. Jung has attracted the ire of investors because of slumping sales and a federal probe about whether the company broke bribery laws overseas.

Related:

Avon’s Andrea Jung loses CEO title