JAB Holdings, the largest shareholder in Reckitt Benckiser, is selling a 4.9-per cent stake in the household consumer goods maker for nearly £1.3 billion ($2.1 billion) to invest the money elsewhere, including funding cosmetics and fragrance company Coty to buy its troubled rival Avon.
JAB Holdings, which manages the interests of the Reimann family of Germany, is cutting its stake in Reckitt Benckiser, the maker of Vanish and Dettol, to 10.4 per cent by selling 36 million shares.
JAB said in a statement that the share sale is a ''desire to diversify its portfolio and invest in new opportunities'' and added that Reckitt Benckiser remained its most important investment.
Shareholders of Avon believe that Coty will now offer a revised bid, which has driven the share price of the company up by 9.3 per cent to $21.60.
In early April, US beauty products maker Avon said it had rejected a $10-billion unsolicited takeover offer from Coty, the world's largest fragrance company. (See: Avon rejects Coty's $10 billion takeover offer)
Coty, known for creating fragrances for celebrities like David and Victoria Beckham, Beyonce Knowles and Jennifer Lopez, offered $23.25 per share, a 20-per cent premium to Avon's closing price of $19.36 on 30 March.