Avon's American curse

13 Oct 2010 By Christopher Swann

Takeover talk has lifted shares of the doortodoor cosmetics firm. Strong demand in emerging markets may make Avon a tempting target for L Oreal or others. But the Avon ladies in Brazil and China come with American sisters whose business model might turn off erstwhile suitors.

This content is for Subscribers only

Context News

Avon Products shares rose on October 12 after the Daily Mail newspaper said French cosmetics maker L'Oreal may be lining up a cash bid for the company.

Citing market rumors, Britain's Daily Mail said L'Oreal was getting ready to make a cash offer of more than $44 a share for the U.S. door to door seller of cosmetics and perfumes, or at least $18.8 billion.

Avon shares were up 2.5 percent, at $33.99 in afternoon trading after surging as high as $36.20 earlier in the day.

Representatives for both Avon and L'Oreal declined to comment.

An offer of $44 a share would represent a premium of 32.7 percent over Avon's Monday closing price of $33.16.

Email a friend

Please complete the form below.

Required fields *