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NEW YORK — Coty Inc. has withdrawn its $10.7 billion proposed acquisition of beauty care supplier Avon Products Inc.
Coty said Monday evening that it had sent a letter to Avon’s board indicating that the fragrance giant is no longer interested in pursuing an acquisition deal of the cosmetics direct seller.
"While we have waited patiently, Avon’s board has now had more than two months to consider whether to engage in discussions and permit us to conduct due diligence. We have not asked the board to accept our proposed purchase price or to agree to sell the company, but only to sit down and discuss whether there might be a common basis for pursuing a transaction that we believe would be beneficial to all parties," Coty chairman Bart Becht stated in the letter.
However, Coty has decided that "two months is enough," Becht’s letter said.
"Consequently, as our deadline to begin discussions expired today, our proposal is withdrawn. It is time for Coty Inc. to move on and pursue other opportunities," he wrote. "While we are disappointed, we wish you success in pursuing your stand-alone turnaround strategy."
In announcing the acquisition proposal April 2, Coty said its offer of $23.25 per share in cash represented a premium of 27% over the three-month volume-weighted average price for Avon shares. Last week, in a letter to Avon’s board on May 9, Coty offered to discuss an increase in the value of its proposal to $24.75 per share and said it would withdraw its offer if Avon didn’t enter into talks by May 14.
Avon said in a brief statement Tuesday that it "responded promptly" to Coty’s May 9 letter and that the Avon board "would consider the contents of the letter."
"Subsequently on May 13, Avon’s board said it would respond to Coty’s letter within one week after considering it in conjunction with management and financial and legal advisers," Avon stated. "On May 14, five days after sending its letter, Coty withdrew its proposal."
Coty’s roster of mass retail brands in its Coty Beauty portfolio of perfumes and colognes includes adidas, ASTOR, Beyonce Knowles, Celine Dion, David and Victoria Beckham, Elite Models, Esprit, Exclamation, Faith Hill, GUESS?, Halle Berry, Heidi Klum, Jovan, Kate Moss, Kylie Minogue, Lady Gaga, Manhattan, Manhattan Clearface, Miss Sporty, Nautica, N.Y.C. New York Color, Nicole by OPI, OPI, Pierre Cardin, Playboy, Rimmel, Sally Hansen, Stetson, Tim McGraw, TJoy and Tonino Lamborghini. The company also offers a wide array of brands under the Coty Prestige portfolio.
