The Avon Products headquarters is seen in midtown Manhattan area of New York, June 21, 2013.Brendan McDermid/Reuters
Avon Products Inc., a direct seller of cosmetics, is in advanced talks to sell its North American business to private equity firm Cerberus Capital Management LP, the Wall Street Journal reported on Thursday.
As part of the deal, Cerberus would also make a minority investment in Avon to strengthen the company's balance sheet, the paper reported, citing people familiar with the matter.
Avon shares rose as high as $4.17 (U.S.) in New York trading. Avon had slid 60 per cent this year through Wednesday.
Avon and the New York-based private equity firm are aiming to agree to a deal this month, the news service said, citing people it didn't name. Lindsay Fox, a spokeswoman for Avon, didn't immediately return messages left by Bloomberg.
The report renewed optimism that investors may be able to wring some value from Avon shares, which have been pummelled by three years of losses and the waning effectiveness of its door-to-door sales model.
New York-based Avon also has struggled recently with currency fluctuations and a new industrial production tax in Brazil, resulting in an unexpected loss last quarter.