NEW YORK, May 14, 2012 /PRNewswire/ -- Coty Inc., a leading global beauty company, today announced that it has sent the following letter to the Avon Products, Inc. (NYSE: AVP) Board of Directors:
May 14, 2012
Board of Directors Avon Products, Inc. 1345 Avenue of the Americas New York, NY 10105
Dear Members of the Board:
Since we first reached out to Avon Products, Inc. at the beginning of March with our acquisition proposal, it has been our sincere hope that we would be able to explore together a friendly combination of our two companies that would provide premium value to Avon's stockholders and benefit its customers, representatives and associates around the world.
While we have waited patiently, Avon's Board has now had more than two months to consider whether to engage in discussions and permit us to conduct due diligence. We have not asked the Board to accept our proposed purchase price or to agree to sell the Company, but only to sit down and discuss whether there might be a common basis for pursuing a transaction that we believe would be beneficial to all parties.
Last week, we offered Avon's Board an increase in the value of our proposal, additional detail on the key areas of focus for our diligence, a willingness to sign a standstill agreement and one last opportunity to engage in discussions. We believe that we provided the Board with ample time to respond, particularly since it has already had months to consider our initial request. Yesterday, we received a two sentence email indicating, without explanation, that Avon's Board would need another week to consider our request. Since receiving your email, we have reached out to Avon's Board, management and advisors to understand why additional time is needed, but we have received no explanation. 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, including Fred Hassan, Andrea Jung and Sheri McCoy.
This continued delay and unwillingness to engage in discussions is disappointing and certainly not a constructive way to proceed. We believe that we provided a compelling and well-financed proposal for a business facing multiple challenges. As you know, our proposal included equity commitments in excess of $5.8 billion from Joh. A. Benckiser, BDT Capital Partners and certain of its limited partners, and Berkshire Hathaway Inc. Debt financing was to be provided by JPMorgan Securities.
We received encouragement from many of your shareholders, research analysts and others in the financial community. Despite this support, your total lack of engagement with us leads us to believe that you remain reluctant to explore a friendly, negotiated combination on a reasonable timetable. Two months is enough. Consequently, as our deadline to begin discussions expired today, our proposal is withdrawn. It is time for Coty Inc. to move on and pursue other opportunities.
While we are disappointed, we wish you success in pursuing your standalone turnaround strategy.
With best regards,
About Coty Inc. Coty was created in Paris in 1904 by Francois Coty, who is credited with founding the modern fragrance industry. Today Coty Inc. is a recognized leader in global beauty with annual net sales of $4.5 billion. Driven by an entrepreneurial spirit, passion, innovation and creativity, Coty Inc. has developed an unrivaled portfolio of notable brands and delivers its innovative products to consumers in 135 markets worldwide. The Coty Prestige brand portfolio is distributed in prestige and ultra-prestige stores and includes Balenciaga, Bottega Veneta, Calvin Klein, Cerruti, Chloe, Chopard, Davidoff, Jennifer Lopez, Jil Sander, JOOP!, Karl Lagerfeld, Kenneth Cole, Gwen Stefani, Lancaster, Marc Jacobs, Nikos, philosophy, Roberto Cavalli, Sarah Jessica Parker, Truth or Dare by Madonna, Vera Wang, Vivienne Westwood and Wolfgang Joop. The Coty Beauty brand portfolio is more widely distributed and includes adidas, ASTOR, Beyonce Knowles, Celine Dion, David and Victoria Beckham, Elite Models, Esprit, Exclamation, Faith Hill, GUESS?, Halle Berry, Heidi Klum, Jovan, Kate Moss, Kylie Minogue, Lady Gaga, Manhattan, Manhattan Clearface, Miss Sporty, Nautica, N.Y.C. New York Color, Nicole by OPI, OPI, Pierre Cardin(1), Playboy, Rimmel, Sally Hansen, Stetson, Tim McGraw, TJoy and Tonino Lamborghini. Coty and Puig S.L. have a strategic partnership for the distribution of the perfume lines of Antonio Banderas, Carolina Herrera, Nina Ricci, Paco Rabanne, Prada, Shakira and Valentino in the United States and Canada.
For additional information about Coty Inc., please visit www.coty.com.
(1) Not available in North America
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. No tender offer for the shares of Avon Products, Inc. has been commenced at this time and Coty Inc. has not indicated any intent to do so.
SOURCE Coty Inc.