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Coty withdraws Avon bid

by Lou Whiteman | Published May 15, 2012 at 1:09 PM

Coty Inc. late Monday, May 14, withdrew its $10.7 billion unsolicited offer for Avon Products Inc., following through on its threat to walk away from the bid if Avon did not engage in talks by its Monday deadline.

The privately held fragrance maker went public with an offer for Avon last month, and last week sweetened its proposal while setting a Monday deadline for Avon to come to the table. Avon earlier Monday said its board would consider the $24.75 per share cash bid, but needed a week to respond.

But New York-based Coty decided not to wait, criticizing Avon's management in a letter withdrawing its offer. Company chairman Bart Becht in a letter to Avon management said that after receiving what he said was a two-sentence e-mail "indicating, without explanation" that the board would need a week, he was unable to reach directors or managers to provide additional information.

"I find it remarkable that since we made our revised proposal, and despite repeated requests over the last 24 hours, no one from Avon's board or management has been willing to speak with us," Becht wrote.

The delay, he said, was unnecessary, since Avon has had two months to consider entering into discussions, and because Coty was not demanding Avon come to a conclusion on whether to consummate a deal. "This continued delay and unwillingness to engage in discussions is disappointing and certainly not a constructive way to proceed," Becht wrote, saying Coty would instead "move on and pursue other opportunities."

Avon, also of New York, in a statement noted that there were only five days between when Coty sent its letter and when it withdrew its proposal. But the company, which reported a first-quarter profit that missed expectations and has been weighed down by an investigation into foreign bribery charges, could face a backlash from shareholders over the inaction.

Shares of Avon traded down $2.22, or 10.71%, to $18.51 on Tuesday morning, nearly 25% below Coty's offer price.

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Coty withdraws Avon bid

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