Coty Ups Bid for Avon with Backing from Buffett

May 10, 2012
In a letter to its rival beauty-products company, Coty said it would offer $24.75 a share, up from $23.25, raising the value of its cash bid to $10.7 billion.

Beauty products group Coty upped its offer for rival Avon Products (IW 500/90) Thursday, saying it had the support of billionaire Warren Buffett in the already once-rejected takeover bid.

In a letter to Avon released by Avon's board, Coty said it would offer the company $24.75 a share, up from $23.25, raising the value of its cash bid to $10.7 billion.

"We continue to believe that our proposal would provide compelling value to Avon's shareholders relative to a difficult and uncertain multi-year turnaround on a stand-alone basis," Coty said in the letter.

"The combination of Avon and Coty would create a global beauty company with broader innovation, branding and execution capabilities to benefit its customers, representatives and associates around the world."

Avon's board made no immediate comment on the new offer; on April 2 it called the earlier bid "significantly below" Avon's value and "opportunistic."

But the letter suggested that Avon remained cold last week when Coty approached the company saying it was willing to raise its offer in private talks.

"We have been disappointed by the current stalemate," Coty said.

It offered to continue negotiations in private, saying that if, in obtaining more data on Avon's finances, "we find considerably more positives than negatives, we would be prepared to propose a higher price."

The company named several equity partners in the proposed deal, among them Buffett's Berkshire Hathaway, well-known for its huge war chest and savvy long-term investment picks.

But Coty also gave Avon until Monday to respond, warning cryptically that "if you do not enter into discussions with us by May 14th, we will have to inform the public markets of the circumstances of our withdrawal."

Copyright Agence France-Presse, 2012

See Also:

Buffett Buys Lubrizol

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!