Avon: S&P Intraday Gainer (Update 1)

Updated to include Avon's rejection of Coty's bid.

NEW YORK ( TheStreet) -- Avon Products ( AVP) was the best-performing stock in the S&P 500 on Monday morning.

The S&P 500 was gaining 4.42 points, or 0.31%, to 1,412.89.

Shares of Avon rose 18.08% Monday to $22.86. Beauty firm Coty put in a non-binding bid to purchase Avon for about $10 billion, or $23.25 a share. The offer price is a 27% premium over the three-month, volume-weighted average price of Avon, according to Coty.

Avon rejected the bid.

"Coty's indication of interest is non-binding and, by its own terms, subject to numerous conditions such as financing, due diligence and the negotiation of a definitive agreement," Avon said in a statement. "Coty's letter to Avon dated March 30 alludes to the possibility that, following diligence, Coty reserves the right to raise or lower its price to acquire Avon. In the final analysis, Coty is attempting to obtain a 'free look' at Avon in the absence of any commitment whatsoever to close a transaction at any price."

The stock gapped up Monday morning to $23.16 from its closing price Friday of $19.36.

Avon has an estimated price-to-earnings ratio for next year of 13.69 times; the average for personal products companies is 15.84. For comparison, Kimberly-Clark ( KMB) has a lower forward P/E of 13.53; Colgate-Palmolive's ( CL) forward P/E is 16.66.

Eleven of the 17 analysts who cover Avon rated it hold; six analysts gave the stock a buy rating.

TheStreet Ratings gives Avon a C grade and hold rating. The stock has risen 30.94% year to date.

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-- Written by Alexandra Zendrian

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