Shares of Avon Products Inc. (NYSE: AVP) are down more than -10% shortly before noon today after suitor Coty Inc. withdrew its $24.75/share offer for the door-to-door cosmetics empire. Avon had asked for another week to consider Coty’s offer, but the potential buyer had already set yesterday as a deadline for some movement from Avon. As we noted earlier this morning, Coty said in its letter that it is “time to move on and consider other opportunities.”
Avon was, perhaps, angling for a bidding war between Coty and Richmont Holdings Inc., a private equity firm that has been said to be preparing a bid for Avon. But for Richmont — and Avon — the price of poker just went down. Restless shareholders, collapsing credit ratings, terrible earnings, and a bribery investigation in China, coupled with a new CEO and a hapless board of directors, all combine to make one wonder why Coty was interested in the first place. If Richmont were to decide to walk away as well, who knows where the share price may end up.
Investors clearly don’t think that a share price north of $24 is in the cards any long. Avon’s stock price has dropped to $18.55, which is a little better than its intraday low of $18.10 this morning, but still well below its closing price of $20.73 last night. The 52-week range is $16.09.$30.42.