Please ensure Javascript is enabled for purposes of website accessibility

The Company That Wants to Buy Coty

By Bradley Freeman – May 28, 2020 at 1:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After a few failed agreements, an acquisition deal may be in the works.

News broke this week on a potential acquisition of American beauty company Coty Inc (COTY -7.05%) by German consumer goods company Henkel AG & Co. (HENO.Y)

The sale would be a total takeover of Coty and would result in the complete rollup of all company assets into Henkel. In the past, Henkel has expressed separate interest for parts of Coty as well as the entire company; now, they want it all.

A hairdresser wearing a mask gives a client a haircut.

Image source: Getty Images.

Potential premium

The deal is rumored to be for a price of $6 to $6.50 per share, with the current Coty stock price sitting at roughly $4.40. Based on the current purchase price, any approved acquisition could carry with it a common equity premium of up to 46% percent for shareholders. 

The deal, however, is far from a guarantee. Just weeks ago, two promising rumored Coty sales to Henkel and private equity firm KKR & Co. Inc. (KKR -2.71%) both fell apart before an agreement could be reached. The coronavirus closing down salons and beauty parlors halted much of Coty's operations, and as a result, an agreement could not be made. In times of such chaos and panic this makes sense, but now that chaos is starting to wane.

This time around, investors will be eagerly looking to see if acquisition rumors come to fruition.

Bradley Freeman has no position in any of the stocks mentioned. The Motley Fool recommends KKR. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Coty Inc. Stock Quote
Coty Inc.
$7.38 (-7.05%) $0.56
KKR & Co. Stock Quote
KKR & Co.
$43.89 (-2.71%) $-1.22
Henkel AG & Co. KGaA Stock Quote
Henkel AG & Co. KGaA

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.