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Coty Reaffirms Interest in Avon Acquisition

Posted: April 16, 2012

Coty Inc., which publicly announced its interest in purchasing Avon in early April, has sent a letter to Avon Products, Inc. discussing its continued interest in making the acquisition.

A copy of the letter sent to Avon follows below:

April 16, 2012
Andrea Jung, Chairman and Chief Executive Officer
Avon Products, Inc.
1345 Avenue of the Americas
New York, NY 10105

Dear Andrea:
Since we first made public our proposal to acquire Avon for $23.25 per share in cash, we have carefully watched the public reaction to the news and
your recent announcement of the hiring of a CEO. We continue to believe in the benefits of our proposed acquisition, and remain interested in meeting with you to discuss our proposal, which we will pursue only on a friendly, consensual basis.

We are confident in our ability to finance the acquisition. BDT Capital Partners, LLC has arranged for equity commitments, which, together with the equity committed to us by the Joh. A Benckiser companies, total more than $5 billion. Coty has also received a highly confident letter from J.P. Morgan Securities LLC for the debt financing. The equity commitments and debt highly confident letter are subject to conditions, including completion of satisfactory due diligence and execution of definitive financing and merger documentation. We intend to structure our financing to achieve an investment grade credit rating for our debt.

Our current proposal of $23.25 reflects what we know about Avon based on public information as well as our concerns with what we do not know. We do not know the extent of the legal issues such as the Foreign Corrupt Practices Act investigation and related investigations and litigation or the extent of the operational challenges, and we cannot calculate the level of synergies from public SG&A information or the amount we would need to reinvest to fix the operational issues. These are all significant items materially impacting the value of Avon.

At this stage, without being invited to complete due diligence, we have no way of knowing the best price we can ultimately pay to Avon shareholders.

As we have also said before, we are prepared to sign a confidentiality agreement to cover our receipt of confidential information.

We believe strongly that the only reasonable way to reach a conclusion on overall value for your shareholders is to do so in private negotiations, after you have given us access to due diligence. We are proposing that we devote no more than a couple of weeks—at your invitation—in confidential discussions to see if we have a basis for proceeding with a transaction. If we do not, each company can move on, taking its separate course.

I sincerely hope you will agree that your shareholders' interests will be best served by meeting with us to discuss our proposal.

With best regards,
Bart Becht

cc: Fred Hassan, board of directors, Avon; Byron D. Trott, BDT & Company; James M. Grant and James C. Wollery, JP Morgan Securities; Mary Anne Citrino, Balckstone Advisory Partners; and Paul Schnell, Skadden, Arps, Slate, Meagher & Flom

Coty also announced it has accepted an invitation from AllianceBernstein to discuss its proposal and answer questions from the investment community, and Coty is providing a webcast of that conversation.