Tags: richmont | avon | coty | bid

Richmont Said Still Interested in Bid for Avon

Tuesday, 15 May 2012 04:27 PM

Richmont Holdings, a closely held investor in consumer brands, is exploring an offer for all or part of Avon Products Inc. and has approached Avon to express its interest, according to people familiar with the matter.

Richmont, which approached Avon before Coty Inc. withdrew a sweetened $10.7 billion bid Monday, is betting Avon would consider its proposal a friendlier alternative, said the people, who declined to be identified because the matter is private. As one option, Richmont may consider offering to buy a minority stake of 25 percent or more, the people said.

Having fended off the Coty offer, Avon is focused on a standalone plan and doesn’t take Richmont’s interest seriously, said another person familiar with the matter.

Richmont has spoken with several private-equity funds and sovereign wealth funds about collaborating on a bid for the world’s largest direct seller of cosmetics, said the people. Richmont contacted Avon before Coty withdrew to say it would be interested in a bid if the company were running a sales process, said one of the people.

Victor Beaudet, a spokesman for New York-based Avon, declined to comment. A phone message left at Richmont headquarters today seeking comment wasn’t immediately returned.

Richmont founder and Chairman John Rochon has lined up what he considers is sufficiently secure financing with outside funds to approach Avon, said one of the people. Rochon has been speaking to a number of Avon shareholders to get their views on his plans, said one of the people.

Rochon, who founded Dallas-based Richmont 25 years ago, served as chief executive officer of Mary Kay Inc., a door-to- door cosmetics seller that awarded its signature pink Cadillacs to top representatives.

Richmont Interest

Richmont attempted to take over Avon in the late 1980s and early 1990s, during Rochon’s tenure at Mary Kay, acquiring 22 percent of its stock at the time.

Coty cited Avon’s “continued delay and unwillingness to engage in discussions” in withdrawing its bid. Coty said attempts to speak to Avon board members, including Chairman Andrea Jung and Chief Executive Officer Sheri McCoy, failed after it received a two-sentence e-mail requesting a deadline extension.

Avon has posted three straight years of falling earnings and last month hired McCoy as CEO from Johnson & Johnson to replace Jung and pursue a turnaround. The company is also in the midst of internal and federal investigations into possible bribery in its overseas operations.

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2012-27-15
Tuesday, 15 May 2012 04:27 PM
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