May 15 (Reuters) - Fragrance company Coty Inc withdrew its $10.7 billion takeover bid for Avon Products Inc (AVP, Financial) on Monday, saying the world's largest cosmetics direct seller had missed a deadline to start discussing a deal that Coty first proposed in March.
The move leaves Avon shareholders relying on new Chief Executive Sheri McCoy to come up with a plan to turn around a company that has been suffering from plummeting profits on falling sales at home and in some international markets, as well as a stock price that had been hammered prior to Coty's bid.
Coty last week raised its unsolicited bid, which had the financial backing of Warren Buffett's Berkshire Hathaway and others, to $24.75 per share from an earlier $23.25 per share offer, and gave Avon a Monday deadline to respond.
Avon, which had rejected outright all of Coty's earlier bids without entering into discussions, said on Sunday in a two-sentence statement that it would look at Coty's latest offer but respond within a week.
"Avon Products responded promptly to Coty's May 9 letter by disclosing it on May 10 and indicating that its board would consider the contents of the letter," Avon said in a statement early on Tuesday.
However, on May 14, five days after sending its letter, Coty withdrew its proposal, Avon said.
Coty, known for fragrances for celebrities like Madonna and Beyoncé, said that no one on Avon's board or senior management, including McCoy, returned its request for an explanation of why Avon needed more time to consider the bid.
"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," Coty Chairman Bart Becht said in a letter to Avon dated Monday and made public. "Two months is enough."
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The move leaves Avon shareholders relying on new Chief Executive Sheri McCoy to come up with a plan to turn around a company that has been suffering from plummeting profits on falling sales at home and in some international markets, as well as a stock price that had been hammered prior to Coty's bid.
Coty last week raised its unsolicited bid, which had the financial backing of Warren Buffett's Berkshire Hathaway and others, to $24.75 per share from an earlier $23.25 per share offer, and gave Avon a Monday deadline to respond.
Avon, which had rejected outright all of Coty's earlier bids without entering into discussions, said on Sunday in a two-sentence statement that it would look at Coty's latest offer but respond within a week.
"Avon Products responded promptly to Coty's May 9 letter by disclosing it on May 10 and indicating that its board would consider the contents of the letter," Avon said in a statement early on Tuesday.
However, on May 14, five days after sending its letter, Coty withdrew its proposal, Avon said.
Coty, known for fragrances for celebrities like Madonna and Beyoncé, said that no one on Avon's board or senior management, including McCoy, returned its request for an explanation of why Avon needed more time to consider the bid.
"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," Coty Chairman Bart Becht said in a letter to Avon dated Monday and made public. "Two months is enough."
Continue reading.
