A former Avon Products Inc. shareholder that has ties to the beauty company Mary Kay is fashioning a takeover bid for Avon, according to a media report.
Fortune magazine said Wednesday that Richmont Holdings is structuring an offer for Avon, but did not give specifics. John Rochon, Richmont's founder and chairman, is the former CEO of Mary Kay. Richmont's website says that Rochon was critical in the management-led leveraged buyout of Mary Kay in 1985, arranging the financing and executing the deal.
Shares of Avon, whose brands include Avon Color, Skin-So-Soft and mark, added 21 cents to $22.43 in afternoon trading. Through the end of last week, its stock was down about 26 percent from its 52-week high of $31.60 last May. Avon's shares now are worth a little less than half of their all-time high of $46.11 in 2004.
Fortune says that Rochon led an attempt takeover of Avon that started in the late 1980s and ended in the early 1990s.
While Richmont was once Avon's biggest stockholder, it has sold its shares in the New York company, Fortune said.
A representative for Avon could not be immediately reached for comment. Richmont says it is their policy not to talk publicly about transactions.
If Richmont does make a bid for Avon, it would come after the company rejected a $10 billion takeover offer from smaller beauty products maker Coty Inc. And on Monday Avon said longtime Johnson & Johnson executive Sherilyn S. McCoy will become its new CEO.
That announcement ended a four-month search to replace embattled CEO Andrea Jung, who had come under fire for failing to stem the company's declines and wrap up a bribery investigation. Jung will remain executive chairman of the 126-year-old company.
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