Avon (AVP) Confirms, Rejects Coty's $23.25/Share Offer

Avon (NYSE: AVP) rejects Coty's unsolicited $23.25 per share indication of interest.

Avon's Board of Directors, consistent with its fiduciary duties, carefully considered an indication of interest from Coty that was substantially the same as one made less than two weeks ago. At that time, the Board concluded, and it still believes, that Coty's indication of interest is opportunistic and not in the best interest of Avon's shareholders.

In reaching its conclusion, Avon's Board considered, among other things:

• Strategic direction: The Board of Directors remains confident in the Company's stand-alone prospects.
  
  
• Coty's indication of interest substantially undervalues Avon and is opportunistically timed: The Avon Board believes Coty's indication of interest, which offers Avon shareholders only a 20% premium over the Company's closing share price on March 30, 2012, does not reflect the fundamental value of Avon and its global beauty care franchise. Indeed, the indication of interest represents a multiple of only 1.1 times Avon's net revenue for the fiscal year ended December 31, 2011 and 8.7 times 2011 EBITDA. This is significantly below multiples that the Board of Directors believes an iconic consumer company is worth in a change of control transaction.
  
  
• The completion of the CEO search: Avon is committed to its publicly announced process of hiring a new CEO and executing against what the Company believes are its strong long-term prospects. With a new CEO, Avon's Board firmly believes that there is greater opportunity to improve shareholder value in excess of Coty's conditional indication of interest.
  
  
• Coty's indication of interest does not constitute a real offer: Coty's indication of interest is non-binding and, by its own terms, subject to numerous conditions such as financing, due diligence and the negotiation of a definitive agreement. Coty's letter to Avon dated March 30 alludes to the possibility that, following diligence, Coty reserves the right to raise or lower its price to acquire Avon. In the final analysis, Coty is attempting to obtain a "free look" at Avon in the absence of any commitment whatsoever to close a transaction at any price.

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