Coty Inc. said it has submitted a non-binding proposal to acquire Avon Products Inc. (AVP) for $23.25 per share in cash in a mutually agreeable and negotiated transaction. The proposal, valued at nearly $10 billion, represents a substantial premium of 27% over the three month volume-weighted average price for Avon shares.
Following extensive but unsuccessful attempts to engage Avon in talks on its proposal, Coty has decided to make its proposal public in order to inform Avon's shareholders of the significant value in a transaction. Also, Coty said it has no intention of pursuing an acquisition on a hostile basis.
Bart Becht, Chairman of the Board of Directors of Coty noted, "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. We believe Avon's shareholders would want their Board to explore with us the benefits to shareholders of a transaction."
Coty, in a letter to Avon's board, expresses desire to open negotiations and Coty also anticipates being able, with Avon's cooperation, to complete due diligence quickly and move forward with a mutually agreeable transaction.
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