NEW YORK - Avon Products needs a bit more time to weigh Coty’s takeover bid.
A cosmetics company known for its international door-to-door sales force, Avon announced Sunday that it would consider Coty’s sweetened $10.7 billion offer. The board of Avon, which is reviewing a letter Coty sent to it Wednesday outlining the offer, said it would respond within a week.
Coty said Sunday that it was unsure why Avon’s board needs more time to begin talks.
“We have reached out to Avon to clarify why they are seeking additional time to respond to our request from last Wednesday to begin discussions and due diligence,’’ Coty said in a statement.
For several weeks, Avon rebuffed advances from Coty, a rival fragrance and beauty company. Coty unveiled a $10 billion bid for Avon in early April. Avon called that offer too low. But Coty - which has spent years building out its beauty business and international footprint through acquisitions - has not let up.
In its letter to Avon’s board, Coty said it was increasing its offer by about 6.5 percent, to $24.75 a share, for a total value of $10.7 billion. Coty also said that Warren E. Buffett’s Berkshire Hathaway was willing to help finance the deal. In a bid to press Avon to move, Coty said the offer could expire if the company did not engage in negotiations by Monday.
Avon’s initial reaction was tepid; the company said in a statement that it would look at the offer in “due course.’’
In his letter, Coty’s chairman, Bart Becht, wrote, “Given the challenges facing your business, we believe the premium is even higher when considering your potential stock price in the absence of a possible transaction.’’
Last year, the companies discussed a possible merger, with Avon, the larger of the two, buying Coty, which is privately held. Deal talks eventually stalled, spurring Coty to play offense.
Coty, which in recent years bought Philosophy, a personal skin care product line, and TJoy, a Chinese skin care company, is particularly interested in Avon’s cosmetics business and its strong position in Brazil, an emerging market Coty is keen to gain traction in. Avon, which has struggled to increase its stock price in recent months, has been hesitant to sell itself without a big premium.