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The quick rejection by Avon (AVP) of a $23.25 takeover offer from Coty Inc., worth $10 billion, seems to have put the direct-sales firm into play.

Shares rose at the open on April 2 but fell in early trade after the rejection. Around noon they stood at $22.28, nearly $1/share lower than the Coty offer.

Avon has fallen by nearly one-third since it warned of earnings below guidance almost a year ago. A second warning, in October, led to a round of shareholder suits against the company. Those earnings were verified by the fourth quarter, a small loss, representing the fourth year in a row of declining earnings.

Avon needs a turnaround, but would new ownership help? Investors must hope that, whether it does or not, a take-out would mean that's not their problem. Takeover Analyst called AVP a perfect activist takeover target here in February.

But who might take the company over? The Takeover Analyst story specifically compared AVP results to those of Estee Lauder (EL). That company has done two smaller takeovers in the last year, first of privately-held Smashbox Beauty Cosmetics, and later of body and hair product maker Aveda.

Together, those acquisitions cost barely $500 million, a pittance next to what Avon would fetch, and while Lauder has the market cap to acquire Avon, it probably lacks the appetite.

Back in 2010, L'Oreal was viewed as a possible acquirer, but nothing came of it. The same story highlighting the L'Oreal speculation also mentioned Unilever and Proctor & Gamble (PG) among possible acquirers.

Out of all those companies, PG would most easily afford the purchase, and its use of the direct sales channel might even be intriguing.

Another name to throw into the fray, because its business model is compatible, would be privately-held Amway. But Amway hasn't done major acquisitions.

So if AVP is really in play, there is no shortage of bidders. Question is, is there a bid? So far, by failing to bid AVP over the price offered by Coty, the answers seems to be no.

But that could change. This is a stock to put on your watch list.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Is There A White Knight For Avon?