Coty share prices reach 52 week high following reports of bid for P&G beauty units

Coty share prices reach 52 week high following reports of bid for P&G beauty units

The share price of Coty has reached a 52 week high of US$31.29 following recent reports that the cosmetics company submitted a bid for Procter & Gamble’s beauty units in a deal worth US$12bn.

In New York trade, Coty shares closed 19.3 percent higher on June 16 and have risen by about 50 percent this year. P&G shares rose also 1.3 percent. 

If the acquisition is confirmed, Coty would gain P&G make-up brands Max Factor and Cover Girl as well as fragrance brands such as Gucci and Hugo Boss perfume. Combined with Coty’s existing fragrance portfolio which includes Marc Jacobs, Calvin Klein and Chloe as well as celebrity perfumes, the deal would make Coty the world’s leading perfume retailer ahead of L’Oreal, according to Euromonitor.

The deal would also signify Coty’s entry into the hair care market through the takeover of P&G brands Wella and Clairol.

Wells Fargo analyst Chris Ferrara told Reuters that the deal would be “transformational” for Coty, estimating that it would increase the company’s revenue from its current level of US$4.4bn to nearly $11bn.

If the deal is completed, it would be facilitated using a “Reverse Morris Trust” for tax purposes, meaning that P&G would consolidate its beauty assets into a separate company that would then absorb Coty in an all-share deal.

 

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