A group of stockholders of Avon Products Inc (NYSE:AVP) led by Barington Capital Group, L.P., NuOrion Partners and Shah Capital that collectively beneficially has around 3.5% of the due common stock of the firm, reported that it has communicated via a letter to the Board of Avon calling on the firm’s Board to promptly keep a financial advisor to assess all strategic alternatives to enhance shareholder value, counting a sale of the firm in whole or in parts.
The details
The Shareholder Group is very disappointed with the deteriorating share price and operating performance that has happened under the stewardship of the prevailing Board. The Shareholder Group is even dismayed by the Board’s disappointment to act decisively and quickly on the past recommendations its participants have made to enhance the long-term performance of the firm, including promptly engaging a new chief executive officer, a measure that has been overdue and participants of the Shareholder Group suggested over two years earlier.
As an outcome, the Shareholder Group has lost assurance in the ability of Avon’s prevailing Board to create substantial long-term value for its public stockholders, and finds no reason why stockholders should remain to wait for a turnaround from firm Board that has witnessed a tremendous decline of shareholder value. The group therefore considers that the best course of initiative is for the Board to keep a financial advisor to evaluate the sale of the firm.
The Shareholder Group considers that Avon would be extremely attractive to a range of purchasers due to its many promising attributes, including its renowned 130-year old brand; its extensive product offering recording sales of more than $5.7 billion; its strong market places in developing nations such as Russia, Mexico and Brazil; its owned manufacturing businesses; and its 6 million direct sales representatives. Besides, a multinational buyer would immediately gain from its ability to enhance Avon’s the tax efficiency and capital structure of its operations.
