Struggling Avon Products Inc. is rejecting a buyout offer worth about $10… (Elise Amendola / Associated…)
There'll be no lipstick-sharing -- yet -- between Rimmel owner Coty Inc. and Avon Products Inc. after Avon rejected Coty’s $10-billion cash bid Monday.
Coty's attempt to buy Avon at $23.25 a share (a 20% premium over the Friday closing price) was both public and unsolicited.
In a snippy note on its website, Avon said the offer "is opportunistic and not in the best interest of Avon's shareholders." Coty had made another, private overture less than two weeks earlier "that was substantially the same," according to the note.
The proposed deal heavily "undervalues" Avon and would allow Coty to adjust its suggested price down the line, the company said.
"Coty is attempting to obtain a "free look" at Avon in the absence of any commitment whatsoever to close a transaction at any price," the note said.
Even before rebuffing its suitor, Avon has had an ugly year: The company’s earnings haven't grown for several quarters. Executives in China are facing an ongoing bribery probe. Chief Executive Andrea Jung is in the process of being pushed out, the company said in December.
After closing at a 52-week high of $29.60 on May 3, Avon stock went into free fall until December. It's been slowly recovering since and was trading up more than 17%, or nearly $23, in afternoon trading Monday.
Privately owned Coty, meanwhile, has kept busy. The company is best known for fragrance brands from the likes of Marc Jacobs and Calvin Klein but has been recently branching into cosmetics and other beauty products, such as Sally Hansen nail care. In 2010, it bought nail-care company OPI Products.
Its sales for the fiscal year that ended June 30 exceeded $4 billion. Avon ended its own fiscal year on Dec. 31 with $11.1 billion -- more than double Coty’s figures.
Unlike Avon, Coty sells its products through retailers instead of going door to door.
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