Is a Buyer Knocking on Avon's Door?

Companies and Brands

Published: January 23, 2015 8:30 am

Last Updated: April 27, 2020 11:51 pm

Nearly three years ago, Avon Products Inc. (NYSE: AVP) turned down an acquisition offer of $23.25 per share from cosmetics house Coty Inc. (NYSE: COTY). Only once since then have shares reached that level, and the stock posted a five-year low of $7.46 earlier this month.

No wonder investors bid the shares up nearly 15% on Thursday on a report that private equity giant TPG Capital is in talks to acquire the company. The New York Post cited unnamed sources in a report from Dealreporter. Avon said it does not comment on market rumors or speculation.

In April 2012, current CEO Sheri McCoy replaced Andrea Jung, who stepped down in December 2011, but the company’s stock has not recovered. In some eyes, any change would be welcome. An analyst cited by the Post said McCoy is “clearly not getting the job done.”

Avon paid $67.6 million after pleading guilty in December 2014 to violating the Federal Corrupt Practices Act. The bribery investigation started under Jung and has cost the company a total of $135 million in penalties.

BMO Capital Markets downgraded the stock from Market Perform to Underperform Friday morning, and Stifel Nicolaus dropped shares from Buy to Hold last October. The consensus price target on the stock is $10.65, which might indicate that a deal in the range of $13 a share might gain traction.

The stock gave some of Thursday’s gain back in the Friday’s premarket, trading at around $8.48 in a 52-week range of $7.25 to $16.21.

ALSO READ: The Bullish and Bearish Case for Procter & Gamble in 2015

The #1 Thing to Do Before You Claim Social Security ^(Sponsor)

Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.

A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.