Coty woos Avon shareholders, outlines financing
By Nadia Damouni and Jessica Wohl
(Reuters) - Coty Inc on Monday urged Avon Products Inc AVP.N shareholders to ask their company to give Coty a look at inside information, which would give the private cosmetics company a chance to then offer its best price.
Avon swiftly rejected Coty's $10 billion offer two weeks ago. Coty has not raised its offer price, saying it needs more details about issues at the company, including a government investigation into possible bribery. Avon, eager to prove it can fix its own problems, tapped Sherilyn McCoy last week to replace Andrea Jung as CEO after a months-long search.
On Monday, Coty outlined some details of its financing, including more than $5 billion of equity commitments and a letter from JP Morgan saying it is highly confident it can arrange about $9 billion of debt financing.
Shares of Avon are currently trading slightly below Coty's offer price of $23.25 per share.
"For us to determine what the best price possible is, all we're asking for is due diligence," Bart Becht, chairman of privately held Coty, said on a conference call hosted by Bernstein Research.
He asked shareholders on the call to reach out to both Avon and its board, to tell them that they support Coty's advances and that Avon should engage with its smaller rival.
He said Coty would try to speak with other Avon shareholders this week. There were more than 200 shareholders on the call, representing well over 50 percent of Avon's shares, Becht said.
"Shareholders should also realize that Coty will not stick around forever," Becht said. Continued...