Avon’s stock rises on report of proposed buyout
by Associated Press
Published: October 12,2010
NEW YORK — Shares of cosmetics and skin care company Avon Products Inc. rose 9 percent in pre-market trading today after a report that L’Oreal may be interested in making a bid for the company.
A report in the U.K.’s Daily Mai said French beauty company L’Oreal SA could offer more than $44 per share for the company. That would be a premium of 33 percent to Avon’s closing share price yesterday of $33.16. The report didn’t say where it got the information
Avon could not immediately be reached. A spokeswoman for L’Oreal, based in Paris, declined to comment.
In response to the recession, Avon, based in New York, stepped up recruitment for direct sellers and added more under-$5 products to its mix. But it is now adding some higher-priced — and more profitable — skin care and jewelry lines to its roster, mainly through acquisitions.
In its most recent second quarter, Avon, which makes 80 percent of its revenue outside of North America, reported its net income rose as revenue increased 8 percent to $2.68 billion.
In addition to namesake products L’Oreal’s brands include its Body shop chain of stores, Matrix and Redken hair coloring products, Garnier skincare products and Lancome luxury creams and ointments.
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