Avon Products (AVP) Surges on Reported Plans to Explore Strategic Alternatives

Shares of Avon Products (NYSE: AVP) surged higher mid-day Tuesday, before being briefly halted on a market circuit breaker, after the WSJ said the company is currently exploring strategic alternatives, including the possible sale of its North American business.

The report said no deal is imminent.

The news follows an unexpected postponement of the company's 2015 Investor Day which was set to take place on May 13, 2015. The event is now expected to take place in Fall 2015.

Notably, Coty (NASDAQ: COTY) tried to buy the company in 2012. Coty's withdrawn offer contemplated paying Avon shareholders $24.75 per share, up an original offer of $23.25 per share, which was rebuffed by Avon. Since that time, however, Avon has been in a terrible nosedive, with the shares down over 50%.

More recent reports suggested the company was in takeover talks with TPG.

In a note to clients on last night's investor meeting postponement, BMO Capital analyst Connie Maneaty warned that "the postponements, coupled with the unprecedented strength of the dollar, economic weakness in important markets (i.e., Brazil), and a revival in the U.S. that seems to be behind plan, reinforce the comment that AVP made on the 4Q14 earnings conference call that it would not meet its turnaround goals of organic sales growth of 4%-6% and an operating profit margin of 10%-plus in 2016." She also said the postponement "may also suggest that AVP’s goals may need to be revised downward or that the timeframe for meeting the goals needs to be extended"

Shares of Avon last traded up 15.7% to $9.27.

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