The group of shareholders says it is “astonished” Sheri McCoy is still CEO
Barington Capital Group, an investor group that owns more than 3% of the outstanding shares of Avon Products, has condemned Avon’s deal with Cerberus Capital Group, made yesterday.
In the deal, Avon agreed it would hand over an 80% stake in Avon North America to Cerberus in return for $170m, while it sold off a 16.6% stake in Avon Products at large for $435m. It also announced that Avon North America would become a privately-held company that is majority-owned and operated by Cerberus.
However, Cerberus has publicly criticised Avon’s recent decision, with James Mitarotonda, Chairman and CEO of Barington Capital Group, stating: “Cerberus clearly recognises, like us, that Avon is an extremely valuable brand. The Avon board apparently does not – it has sold 80% of its North American business and a 16.6% stake in the Company at what we believe are 'fire sale' prices. While we are pleased that six existing board members have agreed to step down, we are astonished that Sheri McCoy remains as CEO. We intend to explore all available options."
A week prior to Avon’s deal with Cerberus, Barington openly lambasted Avon’s recent strategy and business decisions in a public letter. It called Sheri McCoy a “poor choice of CEO” and said the Board had “made a mistake in naming her CEO”.