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NEW YORK, United States — Avon Products Inc., targeted by activists led by Barington Capital Group and NuOrion Partners AG, reached a settlement with the investor group, avoiding a potential proxy fight at the cosmetics company's annual meeting.
The activists agreed to back the addition of former FedEx Corp. executive Cathy Ross to the board, which the company announced Monday. A second director, mutually agreed-on by the activists and Avon will also join the board.
Barington Chief Executive Officer James Mitarotonda said in a statement Monday that the investor group supported Ross’s appointment. Under terms of the agreement, Barington is withdrawing its director nominees for the 2016 annual shareholder meeting.
The pact between the company and the activists was reported Sunday by Dow Jones.
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Avon on March 14 announced plans to move its corporate headquarters to the U.K. from New York as part of a cost-cutting push that also includes the elimination of about 2,500 jobs. The company, which split off its North American operations earlier this month, aims to save as much as $70 million by 2017.
Barington had welcomed that announcement, while saying there is “more that needs to be done.” The activist group, which owns more than 3 percent of Avon, went public with its criticisms in December.
The headquarters move follows Avon’s plan to split off its North American business in a deal with private-equity firm Cerberus Capital Management. As part of the deal, Cerberus invested $435 million in Avon and acquired an 80 percent interest in the North American division for $170 million.
By Beth Jinks; editors: Elizabeth Fournier, Paula Schaap and Kevin Orland.
