(Bloomberg) -- JAB Holding Co. seeks to boost stake in make-up and beauty company Coty Inc. to about 60 percent from 40 percent currently. If successful, the tender offer would give the private conglomerate a controlling stake in the CoverGirl owner. Coty shares spiked in pre-market trading.

Key Insights

• The owner of Clairol and other consumer brands has started to come back from a difficult few years, posting last week strong quarterly results under new Chief Executive Officer Pierre Laubies and promising that a new strategic plan is in the works.
• JAB was already the biggest shareholder in the company. In its affiliate’s offer to buy up to 150 additional shares, JAB said Coty’s recent management changes are “an important first step in addressing the company’s recent performance.” Jefferies analyst Stephanie Wissink said in a note that Coty’s new management seems “more realistic than prior execs on the time required to turn around the business.”
• Investors have had a rough few years. Since Coty announced it would buy P&G beauty in 2015, its share price has dropped 68 percent, and it’s still down 59 percent since the deal was completed. Last fall, it spooked Wall Street with a slew of supply chain disruptions, including a hurricane that forced the shutdown of a manufacturing plant and warehouse in North Carolina.

Market Reaction

• Coty surged as much as 20 percent to $11.58 in premarket trading Tuesday on the news. Coty and JAB didn’t immediately return messages for comment.
• Get more details on the proposed tender offer here.

To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson

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