The global cosmetic giant Coty said on Monday that the company has made a takeover offer worth of $10 billion to the Avon (NYSE:AVP), but the offer was rejected by the latter. Read the related article about the takeover offer by Coty.
Coty said the company had no intention of a hostile acquisition, but the negotiation with Avon over the transaction was indeed very unsuccessful. Coty is a rapidly growing private equity firm, of which the majority stake held by Joh A Benckiser. Coty made a take over offer at the price of $23.25 per share, a premium of 20% compared with the Avon stock closing price of $19.36 last Friday.
Although Avon eventually rejected this deal, but the Coty’s offer has significantly promoted the increase in the Avon stock price.
Avon rejected this offer in a statement on Monday, pointing out this offer has substantially underestimated the value of the company. Avon is now looking for a new CEO candidate to succeed Andrea Jung office since 1999. Avon has said that the new CEO must comprehensively and meticulously understand the company. The beleaguered Avon also is in face of an investigation of a violation in accordance with the U.S. antitrust law.
The Avon stock price surged 17.25%, or $3.34, to close at $22.70 per share with an intrady trading volume of $65.28 million shares compared with the average daily volume of 4 million shares.