Avon Shares Rise, Then Fall After Report of Deal Discussions

Avon Products Inc.’s stock briefly surged on a report that the cosmetics company is in talks to sell a stake to private-equity firms, only to retreat later in the trading session.

Avon has been in discussions with firms such as Cerberus Capital Management and Platinum Equity, the Wall Street Journal said on Thursday. Bids for the transaction -- known as a private investment in public equity, or PIPE -- are due next week, said the newspaper, which cited unidentified people familiar with the matter.

While such a deal would help bolster Avon’s finances, it’s one of several options the company is considering and there’s no assurance that the transaction will happen, the Journal said.

The stock jumped as much as 13 percent after the report was published, but soon gave up the gain. The stock closed at $4.10 in New York, down 9.5 percent.

Lindsay Fox, a spokeswoman for Avon, declined to comment.

In May, Avon was the target of a takeover hoax that sent its shares up 20 percent. The rally was sparked by a fake regulatory filing that described an offer for the company at three times its share price. Regulators later said a Bulgarian man who had pulled similar schemes before was responsible.

Meanwhile, the company has struggled to pull out of a slump. Avon is projected to post its fourth straight year of losses and declining sales in 2015, according to data compiled by Bloomberg.

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