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Coty, the cosmetics group, has hired banks to pursue an initial public offering that would value the company at up to $8bn, just a day after it abandoned a bid to buy competitor Avon.
Bank of America Merrill Lynch and JPMorgan Chase will advise Coty on a potential offering, say sources familiar with the move.
An IPO registration with regulators could be filed in the next few weeks, with the deal aiming for launch in late autumn, and Coty is likely to file with an expectation of a valuation around $7bn-$8bn, according to a source.
Coty and the banks declined to comment.
On Tuesday, Coty withdrew its unsolicited $10.7bn bid to acquire Avon, after a tense six-week stand-off. Bart Becht, Coty’s chairman, said in a letter to the Avon board: “It is time for Coty to move on and pursue other opportunities.”
Coty produces fragrances for brands including Adidas and Calvin Klein and celebrities such as Beyoncé Knowles and David Beckham.
Net sales were $4.1bn for the fiscal year to June 30 2011. The company is majority owned by Joh. A Benckiser, a family holding company based in Luxembourg.
A successful public offering would be a victory for Mr Becht, who joined Coty as chairman last year and is the former chief executive of household products maker Reckitt Benckiser.
To finance the proposed Avon deal, Coty had secured equity financing from Warren Buffett’s Berkshire Hathaway and BDT – a firm founded by Byron Trott, a former Goldman Sachs partner known to be Mr Buffett’s favourite banker – and debt financing from JPMorgan Chase, which is set to take a lead role in the IPO.
A public offering could give Coty a war chest that would allow it to be more aggressive in pursuing acquisitions.