By Serena Ng And Shayndi Raice
Coty Inc. abruptly said its incoming CEO wouldn't be taking the
job a week before he was scheduled to start, keeping a veteran at
the top as it closes in on a multibillion-dollar deal with Procter
& Gamble Co.
Two months after saying Elio Leoni Sceti would be joining as its
new chief executive, the New York based beauty company said he "has
reconsidered and decided not to join Coty." Instead, Coty Chairman
and interim Chief Executive Bart Becht will remain at the helm.
The change in plans comes as Coty is nearing a deal to buy a
portfolio of beauty brands from P&G for as much as $13 billion,
according to a person familiar with the matter. The assets P&G
is selling include CoverGirl makeup, Wella and Clairol salon
hair-care products, and a collection of designer perfumes. Coty and
its representatives are still in talks with P&G and its bankers
on the terms of the deal, which could be announced in the coming
weeks, people familiar with the matter said.
Deutsche Bank analyst Bill Schmitz said in a note Tuesday that
Coty's board may have wanted Mr. Becht to continue running Coty
while it works toward a deal with P&G and to help oversee the
integration of the additional brands. Coty's stock closed up 36
cents, or 1.15%, on Tuesday, at $31.80.
Coty said its board decided that "leadership continuity is
critical in ensuring the continued success of Coty's strategy
implementation," but didn't provide details.
Mr. Leoni Sceti, an Italian businessman who is CEO of European
frozen food company Iglo Group, couldn't be reached for comment
Tuesday. He had been slated to start at Coty on July 1. Coty is
paying him a $1.8 million severance package.
Mr. Becht, a well-connected Dutch businessman who used to run
European consumer-goods giant Reckitt Benckiser Group PLC, is also
chairman of Joh. A. Benckiser GmbH, a German investment company
that owns stakes in Coty and a number of other consumer-goods
businesses.
Coty makes products including Sally Hansen nail polish, Rimmel
cosmetics and many celebrity and designer perfumes. The company has
struggled over the past year to expand its sales in a competitive
beauty market. Since Mr. Becht became Coty's interim CEO in late
September, the company's stock has surged 86%. Analysts say he has
helped stabilize the business and focused on cutting costs.
Much of the stock's run-up has been fueled by expectations that
Coty will soon ink a deal with P&G. That would make Coty the
biggest global seller of fragrances and one of the largest color
cosmetics players, according to Barclays Research.
Tess Stynes contributed to this article.
Write to Serena Ng at serena.ng@wsj.com and Shayndi Raice at
shayndi.raice@wsj.com
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