Avon Rejects Cotys Unsolicited Indication of Interest

Avon Products, Inc. has confirmed that it received an unsolicited, non-binding indication of interest from Coty Inc. to acquire Avon for USD 23.25 per share.

“Avons Board of Directors, consistent with its fiduciary duties, carefully considered an indication of interest from Coty that was substantially the same as one made less than two weeks ago. At that time, the Board concluded, and it still believes, that Cotys indication of interest is opportunistic and not in the best interest of Avons shareholders,” the company informed. The Board of Directors remains confident in the Companys stand-alone prospects.

"Cotys indication of interest substantially undervalues Avon and is opportunistically timed: The Avon Board believes Cotys indication of interest, which offers Avon shareholders only a 20% premium over the Companys closing share price on March 30, 2012, does not reflect the fundamental value of Avon and its global beauty care franchise. Indeed, the indication of interest represents a multiple of only 1.1 times Avons net revenue for the fiscal year ended December 31, 2011 and 8.7 times 2011 EBITDA. This is significantly below multiples that the Board of Directors believes an iconic consumer company is worth in a change of control transaction," Avon stated.

The completion of the CEO search: "Avon is committed to its publicly announced process of hiring a new CEO and executing against what the Company believes are its strong long-term prospects. With a new CEO, Avons Board firmly believes that there is greater opportunity to improve shareholder value in excess of Cotys conditional indication of interest."

"Cotys indication of interest does not constitute a real offer: Cotys indication of interest is non-binding and, by its own terms, subject to numerous conditions such as financing, due diligence and the negotiation of a definitive agreement. Cotys letter to Avon dated March 30 alludes to the possibility that, following diligence, Coty reserves the right to raise or lower its price to acquire Avon. In the final analysis, Coty is attempting to obtain a "free look" at Avon in the absence of any commitment whatsoever to close a transaction at any price."

Avons Board and management are committed to creating value for shareholders and, in so doing, take their fiduciary duties and responsibilities very seriously. The Company remains committed to its publicly stated path of completing the CEO search and executing against what it believes are Avons strong long-term prospects. Cotys indication of interest of $23.25 per share does not provide a compelling reason for Avon to deviate from its current plans. Under the circumstances, Avons Board is convinced that rejecting Cotys indication of interest is in Avon shareholders best interests.