NEW YORK—And the bidding continues … Fragrance company Coty stepped up its offer for direct sales giant Avon with the support of billionaire Warren Buffett in the already once-rejected takeover bid.
In a letter to Avon released by Avon's board, Coty said it would offer the company $24.75 a share, up from $23.25, raising the value of its cash bid to $10.7 billion dollars.
"We continue to believe that our proposal would provide compelling value to Avon's shareholders relative to a difficult and uncertain multi-year turnaround on a stand-alone basis," Coty said in the letter. "The combination of Avon and Coty would create a global beauty company with broader innovation, branding and execution capabilities to benefit its customers, representatives and associates around the world."
Avon's board made no immediate comment on the new offer; on April 2 it called the earlier bid "significantly below" Avon's value and "opportunistic."
But the letter suggested Avon remained cold last week when Coty approached the company saying it was willing to raise its offer in private talks.
"We have been disappointed by the current stalemate," Coty said.
It offered to continue negotiations in private, saying that if, in obtaining more data on Avon's finances, "we find considerably more positives than negatives, we would be prepared to propose a higher price."
The company named several equity partners in the proposed deal, among them Buffett's Berkshire Hathaway, well-known for its huge war chest and savvy long-term investment picks.
But Coty also gave Avon until Monday to respond, warning cryptically that "if you do not enter into discussions with us by May 14, we will have to inform the public markets of the circumstances of our withdrawal."
Avon shares fell 1.9 percent to $21.18 in morning trade, after having jumped more than $2.00 a share on Wednesday on talk of a new bid.
