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 New York-based Cerberus will also invest $435 million for a nearly
17 percent stake in the parent company, the paper reported, citing
people familiar with the matter.
A deal could be announced as soon as Thursday, though it could fall
apart at the last minute, the report said, citing the people.
As part of the deal, Cerberus will designate a new chairman and also
take three seats on Avon's board along with naming two new
independent directors, the Journal said.
The potential deal comes at a time when investors led by Barington
Capital have proposed a restructuring of Avon, saying the cosmetics
maker is "significantly undervalued" and warning against the sale of
its North American arm to Cerberus Capital Management.
Earlier this month, the Barington-led group, which collectively owns
more than 3 percent of the company, laid out its plans in an open
letter sent to Avon Chairman Douglas Conant.
Representatives of Avon, Barington and Cerberus were not immediately
available for comment outside regular U.S. business hours.
Avon, which was valued at nearly $1.8 billion as of Wednesday's
close, has been struggling to reverse a decline in sales for nearly
four years, as it loses representatives – the so-called "Avon
Ladies" – in the United States and grapples with weak demand in
Brazil.
Earlier this year, Avon was the target of a bogus takeover bid made
by a firm calling itself PTG Capital Partners.
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The firm, incorporated in a remote archipelago in the Indian Ocean,
offered on May 14 to buy Avon for $18.75 per share, nearly three
times the company's value at that time.
The U.S. Securities and Exchange Commission has since charged a
Bulgarian man with being the architect behind the hoax.
(This story corrects headline and paragraph 1 to say Cerberus is
close to buying 80 pct of Avon's North American business, not all of
it)
(Reporting By Aurindom Mukherjee in Bengaluru; Editing by Anupama
Dwivedi)
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