Beauty company Avon Products, Inc. (AVP) on Monday rejected an an unsolicited, non-binding indication of interest from Coty Inc. to acquire Avon for $23.25 per share.
Coty's indication of interest is non-binding and subject to several conditions such as financing, due diligence and the negotiation of a definitive agreement.
Avon 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.
"Coty's indication of interest of $23.25 per share does not provide a compelling reason for Avon to deviate from its current plans. Under the circumstances, Avon's Board is convinced that rejecting Coty's indication of interest is in Avon shareholders' best interests," the company said.
Avon said its Board of Directors carefully considered the indication of interest from Coty that was substantially the same as one made less than two weeks ago. At that time, the Board concluded, and it still believes, that Coty's indication of interest is opportunistic and not in the best interest of Avon's shareholders.
The Avon Board believes Coty's indication of interest, which offers Avon shareholders only a 20 percent premium over the company's closing share price on March 30, does not reflect the fundamental value of Avon and its global beauty care franchise.
Avon said it is committed to its process of hiring a new CEO and executing against its strong long-term prospects. Avon's Board firmly believes that with a new CEO, there is greater opportunity to improve shareholder value in excess of Coty's conditional indication of interest.
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