By Micah Maidenberg

The investment firm JAB wants to boost its stake in beauty products company Coty Inc., offering to buy shares from existing stockholders if independent directors on the company's board sign off on the plan.

JAB said in a statement Tuesday an affiliate will pay $11.65 a share to purchase up to 150 million shares of Coty, a 21% premium compared with Monday's closing price of $9.66 a share.

Coty's stock jumped more than 18% in premarket trading on the news. A JAB affiliate already owns about 300.9 million shares in Coty, according to FactSet.

JAB's stake in Coty would rise to 60% from 40% if it purchased the additional 150 million shares, according to FactSet.

In November, Coty's former chief executive resigned and its board chairman stepped down amid weak sales and challenges related to its acquisitions of beauty brands from Procter & Gamble Co.

"We believe that the company has the potential to address its challenges and prosper over the long term, and that the company's recent management changes are an important first step in addressing the company's recent performance," JAB said in its statement on Tuesday.

JAB cautioned that if independent directors on the Coty board don't agree with its offer, the investor won't proceed.

A spokeswoman for Coty couldn't immediately be reached.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

February 12, 2019 08:17 ET (13:17 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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