2. More Avon Ugliness
Shares of the cosmetics company sank almost 10% Tuesday, after Coty yanked its $10.7 billion takeover offer on the grounds that Avon ignored its deadline to begin discussions. Last week, the privately held fragrance company raised its unsolicited, Warren Buffett-backed bid to $24.75 per share from $23.25 based on the premise that Avon would respond to Coty's overture by Monday.In its defense, Avon did respond to Coty on Sunday, tersely saying that its board needed another week to chew on the deal. And considering how disorganized that board is -- heck, former CEO Andrea Jung is on it -- one can understand why it might take it a little extra time to get its act together. Nevertheless, Coty would have none of it and told Avon brass to kiss-off in a letter saying, "Avon's total lack of engagement with Coty leads Coty to believe that Avon remain reluctant to explore a friendly, negotiated combination on a reasonable timetable. Two months is enough." Aww. That's just heartbreaking. It really is true that there is nothing as sad as an unrequited hostile takeover. Since Coty, for no sensible reason, was bidding against itself in the first place; it need not rush back with a higher offer should it change its mind. And if they do decide to take another run at Avon, it may even get a better deal next time considering that Avon stock is now trading below Coty's original bid. As for our good friends at Avon, however, well, now they have to prove that they can do more than play hard to get. Avon shareholders may give new CEO Sheri McCoy a pass this time as she plots her own strategy for turning the company around, but they certainly won't forget this missed opportunity to cash out should the stock fall much further. As we learned from Yahoo's bone-headed decision to spurn Microsoft's merger proposal just a few years ago, that's when things could get really ugly.