JAB divests stake in Reckitt Benckiser to fund Coty's Avon acquisition

10 May 2012

1

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.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more