Avon Products Inc investor Barington Capital Group urged the company to reject a reported deal to sell its North American business at a “fire sale” price, recommending that the cosmetics giant pursue a restructuring plan instead.
The shareholder, which is leading a group that includes NuOrion Partners AG and other investors, said Avon is significantly undervalued and needs new leaders, according to a statement on Thursday. Barington intends to nominate a slate of director candidates for next year’s annual meeting in an attempt to gain sway over the board.
“Avon’s 6 million sales representatives, the backbone of Avon, deserve a senior management team that can reinvigorate the company and introduce new products and marketing campaigns that would resonate with customers,” Barington said in the statement, which was sent to Avon’s board.
In addition to pushing for management changes, Barington wants the company to cut expenses, a move that it says would bring as much as US$700 million in annual savings.
Avon also should invest in operational improvements and increase its dividend, according to the investment firm, which said its group collectively owns more than 3 percent of the beauty company.
Avon said in a statement on Friday that it was aware of Barington’s announcement and that it welcomes feedback from shareholders. The company said it regularly reviews a wide range of options for its business and operations.
“We remain focused on taking strategic actions to drive sustainable, profitable growth, address changing and challenging industry dynamics, create opportunity for our representatives and enhance value for all Avon shareholders,” the company said in the statement.
Avon shares rose 7 percent on Thursday after the Wall Street Journal reported that the cosmetics company was in advanced talks to sell its North American business and an equity stake to Cerberus Capital Management. The stock climbed an additional 5.8 percent to US$4.22 at the close in New York on Friday.
Avon and the private equity firm are aiming to agree to a deal this month, the Wall Street Journal said, citing people it did not name. The company’s statement on Friday made no mention of a potential deal with Cerberus.
The Journal report renewed optimism that investors might be able to wring some value from Avon shares, which have been pummeled by three years of losses and the waning effectiveness of its door-to-door sales model.
Avon also has struggled recently with currency fluctuations and a new industrial production tax in Brazil, resulting in an unexpected loss last quarter.
In its response, Barington said that selling a stake at the current stock price does not make sense.
“We would oppose any sale of the North America business on terms that are disadvantageous to current shareholders or limit the options for a new senior management team to maximize long- term shareholder value,” the company said.
“We would also oppose a sale of a dilutive equity stake at a ‘fire sale’ price,” it added.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
Industrial production expanded 22.31 percent annually last month to 107.51, as increases in demand for high-performance computing (HPC) and artificial intelligence (AI) applications drove demand for locally-made chips and components. The manufacturing production index climbed 23.68 percent year-on-year to 108.37, marking the 14th consecutive month of increase, the Ministry of Economic Affairs said. In the first four months of this year, industrial and manufacturing production indices expanded 14.31 percent and 15.22 percent year-on-year, ministry data showed. The growth momentum is to extend into this month, with the manufacturing production index expected to rise between 11 percent and 15.1 percent annually, Department of Statistics
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
RSS