* Bank of America Merrill Lynch, JPMorgan to lead - source
* Coty to file prospectus soon - source
By Nadia Damouni and Phil Wahba
May 16 Beauty company Coty Inc has picked its
lead underwriters for a planned initial public offering this
fall, two days after it pulled a $10.7 billion unsolicited
offer to buy Avon Products Inc, a person familiar with
the matter told Reuters.
The fragrance maker, founded in Paris in 1904 by François
Coty, has selected Bank of America Merrill Lynch and
JPMorgan Chase & Co to lead the IPO, the source said.
Coty declined to comment, as did Bank of America and
Coty, which is based in New York, plans to file a prospectus
with U.S. regulators soon, the source said.
The IPO would value Coty, known for fragrances for Madonna
and sports brand Adidas AG at more than $7 billion,
the source said.
That would make it almost as valuable as Avon, which has a
market value of about $8 billion, but has nearly three times the
Two days ago, Coty withdrew its offer for Avon, which it
first disclosed in early April, faulting what it said was the
direct seller's "unwillingness" to sit down and talk.
Coty had been considering an IPO before it looked at a deal
with Avon. Last month, on a conference call aimed at making
Coty's case to Avon shareholders, Chairman Bart Becht said Coty
might go public if a deal did not come to pass.
Coty's products run the gamut from luxury perfumes for
Bottega Veneta to skin care products sold at Wal-Mart Stores Inc
. Its revenues rose 14 percent to $4.1 billion in its
fiscal year ended June 2011 and Chief Executive Bernd Beetz told
Reuters last year they would make double-digit percentage gains
In trying to strike a deal with Avon, Coty was looking to
gain more access to growing markets such as Brazil, Russia and
Mexico and deepen its roster of products.
Fragrances made up 57 percent of that, with skin care and
makeup accounting for the rest, and the bulk of its revenue come
from Europe and North America.
In recent years, Coty has made acquisitions to grow and
diversify its products.
In 2010, it bought skin care brand Philosophy from The
Carlyle Group, nail color company OPI and a majority stake in
Chinese skin care company TJoy Holdings.
Coty is majority owned by German conglomerate Joh. A.
Benckiser. It competes against companies such as Estée Lauder
Cos Inc, L'Oreal SA and Elizabeth Arden Inc
The news of Coty's plans was first reported by CNBC.