NEW YORK, April 16, 2012 /PRNewswire/ -- Coty Inc., a
leading global beauty company, today announced that it has sent a
letter to Avon Products, Inc. (NYSE: AVP).
Coty also announced that it has accepted an invitation from
AllianceBernstein to discuss its proposal and answer questions from
the investment community today at 10:00 AM
ET. Coty is providing a live webcast of that conversation at
http://coty.pressnews.net/. A replay of the webcast will be
available beginning later today at http://coty.pressnews.net/.
A copy of the letter sent to Avon follows below:
April 16, 2012
Andrea Jung, Chairman and Chief
Executive Officer
Avon Products, Inc.
1345 Avenue of the Americas
New York, NY 10105
Dear Andrea:
Since we first made public our proposal to acquire Avon for $23.25
per share in cash, we have carefully watched the public reaction to
the news and your recent announcement of the hiring of a CEO.
We continue to believe in the benefits of our proposed acquisition,
and remain interested in meeting with you to discuss our proposal,
which we will pursue only on a friendly, consensual basis.
We are confident in our ability to finance the
acquisition. BDT Capital Partners, LLC has arranged for
equity commitments which, together with the equity committed to us
by the Joh. A Benckiser companies, total more than $5 billion. Coty has also received a highly
confident letter from J.P. Morgan Securities LLC for the debt
financing. The equity commitments and debt highly confident
letter are subject to conditions, including completion of
satisfactory due diligence and execution of definitive financing
and merger documentation. We intend to structure our
financing to achieve an investment grade credit rating for our
debt.
Our current proposal of $23.25
reflects what we know about Avon
based on public information as well as our concerns with what we do
not know. We do not know the extent of the legal issues such
as the Foreign Corrupt Practices Act investigation and related
investigations and litigation or the extent of the operational
challenges, and we cannot calculate the level of synergies from
public SG&A information or the amount we would need to reinvest
to fix the operational issues. These are all significant
items materially impacting the value of Avon.
At this stage, without being invited to complete due diligence,
we have no way of knowing the best price we can ultimately pay to
Avon shareholders.
As we have also said before, we are prepared to sign a
confidentiality agreement to cover our receipt of confidential
information.
We believe strongly that the only reasonable way to reach a
conclusion on overall value for your shareholders is to do so in
private negotiations, after you have given us access to due
diligence. We are proposing that we devote no more than a
couple of weeks – at your invitation – in confidential discussions
to see if we have a basis for proceeding with a transaction.
If we do not, each company can move on, taking its separate
course.
I sincerely hope you will agree that your shareholders'
interests will be best served by meeting with us to discuss our
proposal.
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With best
regards,
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Bart
Becht
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cc:
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Fred
Hassan, Board of Directors of Avon Products,
Inc.
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Byron D.
Trott, BDT & Company, LLC
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James M.
Grant, James C. Woolery, J.P. Morgan Securities LLC
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Mary Anne
Citrino, Blackstone Advisory Partners L.P.
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Paul
Schnell, Skadden, Arps, Slate, Meagher & Flom LLP
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This letter and our proposal constitute a preliminary,
non-binding indication of interest to acquire the outstanding
shares of Avon, and our proposal is being submitted based on the
understanding that it is not an offer that is capable of being
accepted and that there will be no binding agreement between us or
any commitment or obligation on either party with respect to the
proposal or a possible transaction unless and until a definitive
agreement is executed by Avon and
Coty. We reserve the right to discontinue discussions
regarding, and withdraw, our proposal at any time. Our
proposal is subject to customary conditions, including, among other
things, our satisfaction with the results of due diligence in our
sole discretion, the negotiation of a mutually satisfactory
definitive agreement, financing and the approval of the negotiated
terms of a transaction by our Board of Directors.
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.
(1) Not available in North
America
Additional Information
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.