Billionaire investor Warren Buffett, who has recently been swatting at rumors about his health and his company's line of succession, is thinking about things cosmetically these days: Berkshire Hathaway is participating in makeup company Coty Inc.'s $10.6-billion bid to take over Avon Products Inc.
Coty's new $24.75-a-share offer boosts last month's $23.25-a-share proposal to buy the struggling direct-sales beauty company, according to a letter that Avon made public Thursday. It's a 36% premium on Avon's closing price on March 6, just before Coty made its initial $22.25-a-share bid. And Coty has suggested that it may even be willing to offer more.
In the letter, Coty Chairman Bart Becht names Berkshire as one of the equity financing sources for the deal, along with Joh. A. Benckiser and BDT Capital Partners. He wrote that he was "disappointed by the current stalemate" with Avon.
The letter said the deal would "provide compelling value to Avon's shareholders" compared with the company’s other option: "a difficult and uncertain multi-year turnaround on a stand-alone basis."
Avon's first-quarter results and earnings forecast disappointed analysts. Earlier this month, Standard & Poor's lowered the company's credit rating. In April, Avon swapped Chief Executive Andrea Jung -- who had been dealing with foreign corruption probes into the company -- for former Johnson & Johnson honcho Sherilyn McCoy.