3G Capital Inc., the private-equity firm backed by Brazilian billionaire Jorge Paulo Lemann, has $1.4 billion that it could use to back Coty Inc.’s bid for Avon Products Inc., Trevor Stirling and Ali Dibadj, analysts at Sanford C. Bernstein & Co., said today in a note.
3G Capital, based in New York, freed up the funds by selling a 29 percent stake in Burger King Worldwide Holdings Inc. to Bill Ackman’s Justice Holdings, Stirling said in the report. The companies have ties through Peter Harf, a Burger King director who previously served as Coty’s chairman.
Avon rejected Coty’s $10 billion offer on April 2, saying it undervalued the company and that its own turnaround is under way. A week later, New York-based Avon named former Johnson & Johnson executive Sherilyn McCoy as CEO to replace Andrea Jung, who will remain as chairman.
Coty, also based in New York, has said it is confident in its financing for the offer, including backing from Joh. A Benckiser SE, which owns Coty, and from BDT Capital Partners totaling more than $5 billion.
A spokesman for Coty declined to comment. A 3G spokesman didn’t immediately return a call.
Avon rose 1.6 percent to $22.19 at the close in New York. The shares have gained 27 percent this year.
Dibadj rates the shares market perform, the equivalent of a hold.