Avon Japan Sale Called Off; Unit Back on Market

Avon Products, the embattled cosmetics and jewelry giant, said Friday that the $450-million sale of its profitable Avon Japan unit to a Japanese buyer was terminated but that it plans to resume talks with other bidders.

The company has operated in Japan for 20 years with a network of 350,000 sales representatives.

Avon, best known for its door-to-door Avon Ladies, had announced the proposed sale of the unit in February to Tokyo-based Friends of Freesia Co. and Veji Sasaki, Freesia’s president.

Avon said that under terms of an agreement, the two Japanese bidders will forfeit a $6.3-million escrow deposit made when the agreement was signed.

Avon shares closed up 37.5 cents on the New York Stock Exchange at $35.50.

Separately, an amendment to Avon Products’ shareholder rights plan that was intended to foil any unfriendly takeover attempt was declared invalid by a federal judge Friday.

Chartwell Associates, a dissident investor group with a 16% stake in Avon, had challenged the cosmetics giant’s amendment to its complex shareholder rights plan adopted in 1987.