Coty Tries To Kiss and Makeup With $10.7B Avon Bid

Updated to reflect Bank of America comments and updated share prices.

NEW YORK (TheStreet) -- Privately held fragrance maker Coty has upped its unsolicited bid for Avon Products (AVP) to $10.69 billion or $24.75 a share, in an effort to turn what was a hostile negotiation friendly.

In raising its bid by roughly 6.5% from $23.25, Coty said it would need a confidentiality agreement from Avon Products and the ability to conduct due diligence on its bid by Monday.

Avon Products, which recently reported weaker than expected first quarter earnings, had its credit rating downgraded and hired a new chief executive, has so far been unwilling to enter the friendly negotiations that come with Coty's bid increase.

In a letter disclosed by Avon Products on Thursday, Coty chairman Bart Becht is offering a $1.50 increase to the company's April 2 initial offer, in an effort to turn takeover negotiations friendly. The letter said that when first approaching Avon Products, talks started at $22.25 and rose by $1 when an offer was first publicly announced. Coty also unveiled Warren Buffett run-Berkshire Hathaway (BRK.A) as an underwriter for the offer, which is contingent on siginificant debt and equity financing.

In response, to Coty's initial bid valued at roughly $10 billlion, Avon Products immediately rejected the April offer. However, Thursday's play by Coty and its attempt to enter friendly negotiations may warrant a closer look. When releasing Coty's $24.75 a share offer, Avon Products said it would consider the bid "in due course."

7 Dividend Stocks You Can't Ignore Right Now >>

Since the takeover battle first emerged, Avon Products has hired Sherilyn S. McCoy, a former Johnson & Johnson (JNJ) executive as its chief executive after Andrea Jung stepped down as CEO in December, amid the company's underperformance and bribery allegations in its China-based business.