April 2, 2012 6:42 PM

Skadden, Wachtell Advising as Coty Makes Unsolicited $10 Billion Bid for Avon

Posted by Tom Huddleston Jr.

The maker of Calvin Klein fragrances has come calling for Avon.

Closely held perfume maker Coty announced Monday that it has made an unsolicited offer of almost $10 billion for Avon Products. Avon quickly slammed the door on the Coty overture, saying it “substantially undervalues Avon and is opportunistically timed.”

Though Coty’s $23.25-a-share cash offer is 20 percent higher than the price at which Avon ended trading,  Avon said Coty is simply trying to get a “free look” at a rival’s financials without making a serious offer. Shares of Avon, which is reeling from weak sales and a bribery scandal in China, have dropped by more than a third over the past year.

In a statement, Coty said it doesn’t intend to wage a hostile takeover and would prefer to pursue discussions with Avon’s board. Coty, which also sells Beyonce and other celebrity-branded perfumes, is interested in marketing its products via Avon’s door-to-door sales force.

Skadden, Arps, Slate, Meagher Flom is advising Coty on its offer. The Skadden team is led by New York MA partners Paul Schnell and Neil Stronski. In 2010, the firm advised Coty on its acquisition of nail polish company OPI Products.

Despite Coty’s prostestations that it does not plan to go hostile, Avon  has turned to Wachtell, Lipton, Rosen Katz corporate partner Andrew Brownstein. Wachtell, of course, is no stranger to representing companies contending with unsolicited takeover offers.

The firm—whose co-founder Martin Lipton invented the poison pill takeover defense—has in recent months been hired by several companies, including SemGroup and Vulcan Materials, defending themselves against hostile bids. In the latter case, Wachtell is facing off against Skadden, which represents Vulcan bidder  Martin Marietta Materials.

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