Coty Board Accused of Selling Company Out to German Conglomerate

Coty Inc.’s top executives have been hit with a lawsuit accusing them of selling out shareholders by helping German conglomerate JAB Holding Co. take over the company on the cheap.

Coty’s directors succumbed to conflicts of interests when they urged investors to approve “an opportunistically timed, coercive, and misleading tender offer” by a JAB affiliate, a shareholder claims in a complaint unsealed May 9. Those board members all have “substantial, long-standing ties to JAB,” the partly redacted suit says.

The $1.7 billion deal gave JAB control over 60% of the beauty and fragrance giant’s voting stock, up from 40% before ...