Beleaguered cosmetics firm Avon Products Inc. (NYSE: AVP) announced Monday morning that it has reached an agreement with Barington Capital Group and a group of investors that will put an end to a threatened proxy fight at the company’s upcoming annual shareholders meeting. The investor group owns more than 3% of Avon’s outstanding shares.
Under the terms of the agreement, Barington has been granted the right to approve the appointment to Avon’s board of an independent director chosen by Avon and Cerberus Capital Management. In exchange, Barington has withdrawn its nominations for election to the company’s board and will vote all its shares in favor of the board’s nominees.
In a separate announcement, Avon announced the appointment of Cathy D. Ross, the chief financial officer of FedEx until her retirement in 2014. Barington’s chairman and CEO, James A. Mitarotonda, said that his firm supported Ross’s appointment.
Avon will add another independent director to its board, and the company’s nonexecutive chairman said the company is looking forward “to working with Barington to complete that process.” Once the next appointment is made Avon will have 11 members on its board.
Cerberus Capital earlier this month completed its purchase of Avon’s North American business and now has three seats on Avon’s board, including the chairman.
Avon shares traded up more than 7% Monday morning, at $4.60 in a 52-week range of $2.21 to $9.47.