Avon Products Inc. is anticipating a settlement of a fight with activist investors that would enable the tormented beauty-products retailer to avoid a proxy fight. With that, the Barington-NuOrion group would not ascend a dispute for board seats at May 26 annual meeting as part of the expected agreement.
According to Reuters, the settlement with the shareholders Barington Capital and NuriOn AG Partners could be declared as early as Monday morning. It would be a move to cool off a disagreement that heated on December 3.
This was when the investors sent an open letter to Avon Chairman Douglas Conant calling for restructuring. Avon is expected to add another director, which is the former FedEx Corp executive,Cathy Ross. Later on, the board would also have 11 members.
The WALL STREET JOURNAL noted that the Barington-NuOrion group, which owns more than 3% of Avon, would not mount a battle for board seats at the May 26 yearly meeting as part of the expected settlement. The agreement is allegedly a part of a deadline for investors to debut such a dispute arrived, and after they had privately submitted their nominees.
The agreement with the shareholders Barington-NuOrion group will also give Avon some peace of mind after a tumultuous several months for the company. In fact, earlier this month, the beauty-products retailer announced a 7% reduction in its workforce in an effort to move designed to appease PE-backer Cerberus and other key investors, as claimed by Seeking Alpha.
The dispute came two weeks after Avon stated that it will cut about 2,500 job offers in its branch stores around the world and will shift its corporate headquarters from New York to the United Kingdom. After obtaining the letter from the activist investors in December, Avon mad a deal to turn over its North American business to an affiliate of Cerberus Capital Management LP.CBS.UL
Meanwhile, reports claim that the expected deal with the activist investors is set to be scheduled on Sunday. But a representative for Avon and the activists did not respond to a request for a comment regarding the matter.
