NEW YORK (TheStreet) -- Shares of Avon Products (AVP) - Get Avon Products, Inc. Report are higher by 4.44% to $4.47 in mid-morning trading on Monday, as the cosmetics company announced today that it has reached a settlement to resolve a fight with activist investors that would avoid a proxy fight.
The company announced that an investor group headed by Barington Capital has agreed to withdraw its bid to elect two opposing candidates to Avon's board in May.
For its part, Avon agreed to elect an independent director to the board, who will be chosen by the company and Cerberus Capital Management, who is Avon's private equity partner.
"We are pleased to have reached this settlement agreement with Barington, which allows us to avoid a potential proxy contest. We have a process underway to identify the additional independent Board member and we look forward to working with Barington to complete that process. " Avon's non-executive chairman Chan W. Galbato said in a statement.
Separately, TheStreet Ratings has set a "sell" rating and a score of D on Avon Products stock. This is driven by a few notable weaknesses, which TheStreet Ratings believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers.
The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: AVP