Beauty company Coty Inc. is no longer interested in wooing Avon Products Inc., withdrawing its takeover bid and sending Avon’s stock plummeting more than 10%.
In a "Dear Avon" letter Monday night, Coty Chairman Bart Becht bashed the struggling company’s “total lack of engagement” even after being offered $10.6 billion.
Rimmel and Sally Hansen owner Coty first reached out in early March and then “waited patiently,” Becht wrote, even boosting its initial $22.25-a-share offer to $24.75 a share last week. Warren Buffett’s Berkshire Hathaway was among the backers for Coty’s bid.
But after setting a May 14 deadline last week for the direct sales cosmetics company to come to the table, Becht said Coty received a two-sentence email over the weekend saying that Avon’s board needed another week to consider the acquisition proposal.
Repeated attempts to contact Avon for an explanation were ignored, Becht wrote. Avon has rebuffed or sidestepped Coty’s past courtship efforts.
“This continued delay and unwillingness to engage in discussions is disappointing and certainly not a constructive way to proceed,” Becht wrote. “It is time for Coty Inc. to move on and pursue other opportunities.”
In a short statement Tuesday, Avon wrote that it had “responded promptly” to Coty’s final outreach.
That leaves Avon, which recently replaced its longtime Chief Executive Andrea Jung with Johnson & Johnson veteran Sherilyn McCoy, to pursue a standalone turnaround strategy. But judging by its sliding stock – down nearly 13% when it opened Tuesday and still down 10.5% at $18.56 in mid-day trading in New York – investors will need some convincing.