Avon Cody Deal Rejected
In one of the more interesting developments recently in the Direct Selling niche, Avon was recently offered roughly $10 billion dollars from Cody Inc. for an outright purchase of the venerable 125 year old company, effectively making the Avon Cody deal dead for now.
This offer lead to a 19% rise in stock price for Avon, going up to $23.10 at one point on 2 April.
Interestingly, the offer itself was made and rejected over two weeks ago, and was just recently made public.
According to CNN.com
…said it decided to make its offer public “in order to inform Avon’s shareholders of the significant value in a transaction.” Coty said its announcement has followed “extensive but unsuccessful attempts to engage Avon in discussions regarding its proposal,” but that it does not to plan to pursue a hostile takeover.
So, in the end, clearly Cody is very eager to get this deal done.
This could be because of end of the year financial troubles from Avon itself, as its total year to year revenue decreased roughly 4% during 4th quarter Avon 2011.
Why did Cody make the offer to buy the venerable cosmetics giant? According to the a statement released by the company.
“At the time, the board concluded, and it still believes, that Coty’s indication of interest is opportunistic and not in the best interest of Avon’s shareholders,”
What do you think about the Avon Cody deal?