Avon Products Inc. shares tumbled 12 percent on a report that the makeup company is struggling to find a buyer.
Potential suitors, including private-equity firms and beauty-product maker Coty Inc., aren’t interested in bidding for Avon, the New York Post reported. Though buyout firms initially approached Avon about making a deal, they’ve had difficulties lining up financing, the Post said, citing unidentified people familiar with the situation.
The report sent shares down to $7.20 at the close in New York on Tuesday, the biggest one-day drop since October 2013. The company was contemplating a sale of its struggling North American operations, people with knowledge of the situation told Bloomberg last month. The makeup company wasn’t running a formal sales process, they said at the time. In April, Avon postponed an investor meeting scheduled for May 13, spurring speculation that it was in deal talks.
Avon has posted three straight years of losses and declining sales, putting pressure on the company to explore its options. Linda Bolton Weiser of B. Riley & Co. had estimated that the entire business could fetch a takeover valuation of about $6 billion. After Tuesday’s plunge, it currently has a market capitalization of about $3.2 billion.
Representatives for Coty and New York-based Avon declined to comment.