Coty Offers $10 Billion in Hostile Takeover Effort of Avon

One of Coty's many fine brands
One of Coty’s many fine brands

Courtesy Beckham Fragrances.

Coty, a privately held cosmetics company owned by a German family holding company, has offered to buy Avon Products for $10 billion. Coty has apparently been in talks about this for a while, and the $10 billion bid represents a 20 percent premium above Avon’s Friday closing price and a 27 percent premium over Avon’s average price during the past three months, but Avon has rejected the bid. Coty thinks this is a good deal for Avon’s shareholders and so is taking the offer public.

Coty isn’t a well-known brand name because these days one of its main lines of business is producing celebrity-branded fragrances. So Beyoncé Parfums, Faith & Tim Fragrances, and so forth are actually Coty brands. The offer is all-cash, no shares since Coty is a private company, so for Avon shareholders this would be a total exit from the business. If the deal ultimately goes through it’ll be the latest example of what seems to be an ongoing trend away from publicly traded companies in a variety of fields.