Avon Shares Rise on Report That Company Is in Deal Talks

Avon Products Inc., the world’s largest seller of door-to-door cosmetics, jumped the most in almost two years after Dealreporter said the company has held talks with private equity firm TPG Capital about a possible transaction.

The report sent the shares up 15 percent to $8.66 in New York, the biggest one-day increase since February 2013. The stock declined 45 percent last year.

Avon is seen as a candidate for a leveraged buyout because it has strong cash flow, Dealreporter said, even though sales have been slumping in recent years. The takeover speculation follows the end of a six-year U.S. investigation into whether Avon’s Chinese subsidiary bribed local officials. The company pleaded guilty last month and agreed to adopt internal controls and pay $135 million in fines.

It isn’t clear if the TPG talks have advanced or whether Avon has hired advisers to consider a deal, said Dealreporter, which cited three unidentified people within the industry.

Owen Blicksilver, a spokesman for TPG, declined to comment to Bloomberg News, as did Lindsay Fox, a spokeswoman for New York-based Avon.

Avon joins Elizabeth Arden Inc., another beauty company, in spurring takeover talk. Elizabeth Arden, maker of Elizabeth Taylor and Britney Spears brand perfumes, hired Goldman Sachs Group Inc. last year to contact private equity firms about a possible deal, a person familiar with the matter said at the time. The company had attracted interest from South Korea’s LG Household & Health Care Ltd., the person said.

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