Avon Defends Against Coty Takeover With CEO Appointment
This article was originally published in The Rose Sheet
Executive Summary
After rebuffing Coty’s $10 billion acquisition offer April 2, Avon has appointed former J&J vice chairman Sheri McCoy as CEO. One analyst says the move is intended to “help defend the company from a Coty takeover.” Others believe Coty will come back with a sweeter proposal in the coming weeks.
You may also be interested in...
Unilever Exec Takes Avon's Reins, Says 'Business As Usual' Not An Option
"The Avon Board looks forward to supporting Jan as he leads a deep and comprehensive strategic and operating review of all facets of the business," says Chairman Chan Galbato of Jan Zijderveld's appointment as CEO. Avon's first male CEO in almost 20 years, Zijderveld comes with 30 years of experience at Unilever, where he most recently oversaw its European business.
Avon’s Dismal Q1 Makes Coty Bid More Appealing – Analysts
The first fiscal quarter of 2012 was “unexpectedly weak” for Avon Products, with sales down 2% to $2.6 billion and net income plummeting 82% to $26.5 million, making clear the challenges ahead for the firm and its new CEO. Analysts believe Coty may have a better chance of acquiring the New York-based direct seller in light of the Q1 results.
Coty Makes Offer For Avon, Smelling “Blood in the Water” – Analyst
Coty envisions “an iconic beauty company” to emerge from its proposed acquisition of Avon; however, the direct seller’s management has dismissed the offer as “opportunistic” and not in shareholders’ best interest. Coty is now appealing directly to shareholders, highlighting the firms’ complementary product portfolios and geographical strengths. Meanwhile, Avon seems intent on finding growth and profitability on its own.