Richmont Said to Be Arranging Financing for Avon Bid
Richmont Holdings, a closely held company that invests in consumer brands, is arranging financing to make a bid for Avon Products Inc. (AVP), said two people familiar with the matter.
Richmont has hired financial advisers and is well along toward assembling a bid, said the people, who declined to be identified because the matter isn’t public.
Avon, the world’s largest direct cosmetics seller, rejected a $10 billion bid from Coty Inc. last month, saying the offer was too low and the company was undertaking a turnaround. Avon held its shareholder meeting in New York today, and new Chief Executive Officer Sheri McCoy told attendees that stabilizing the business is her top priority.
The appointment of Avon’s new CEO hasn’t dissuaded Richmont, which would continue Avon’s global direct-selling model, said one of the people.
Richmont founder and Chairman John Rochon served as CEO of Mary Kay Inc., a door-to-door cosmetics seller that awarded its signature pink Cadillacs to top representatives. 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.
Richmont’s plans now may depend in part on Coty’s next move, said one person.
Avon didn’t respond to Coty’s April 30 deadline to consider further talks, a Coty adviser said yesterday.
Family-owned Richmont was founded 25 years ago, according to its website.
Fortune magazine reported that Richmont was preparing a bid last month.
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