Coty's bags Warren Buffet backing for Avon, raises bid

Coty Inc, the world's largest fragrance company yesterday took Warren Buffet's backing and raised its bid for US beauty products maker Avon Products Inc, but said it would withdraw the offer if Avon did not enter into talks by 14 May.

Coty, known for creating fragrances for celebrities like David and Victoria Beckham, Beyonce Knowles and Jennifer Lopez raised its offer to $24.75 per share, or $10.65 billion. The revised price is 6.5 per cent higher than its previous offer.

In early April, Coty had launched an unsolicited $23.25 per share or $10-billion, which was immediately rejected by Avon's board saying that the low-ball offer is not in the best interest of its shareholders.

Avon also had said Coty's offer is non-binding and is subject to numerous conditions such as financing, due diligence and the negotiation of a definitive agreement.

In the letter written dated 9 May and made public yesterday, Coty chairman Bart Becht said that his company has received equity financing for the deal from its main shareholder, Joh A Benckiser, BOT Capital Partners and some of its limited partners, and Warren Buffett's Berkshire Hathaway, while JPMorgan Securities would provide debt financing.

To strengthen its bid for Avon, the Paris and New York City-headquartered fragrance maker has roped in Berkshire Hathaway, but it did not reveal how much equity financing Warren Buffett's investment company was providing.