Beauty company Coty Inc said on Monday it offered to buy Avon Products Inc for $10 billion (6 billion pounds), but the bid was rejected by the cosmetics direct seller, which is grappling with sliding sales in key markets and a bribery probe.

Coty, whose products include fragrances for celebrities including Beyonce and Lady Gaga, said it had no plans to make a hostile bid but had been unsuccessful in getting Avon to talk about a deal.

Coty, a fast growing privately held company majority-owned by Joh. A Benckiser, is offering $23.25 per share, a 20 percent premium over Avon's Friday closing price of $19.36 on the New York Stock Exchange.

Shares of Avon rose 19.3 percent to $23.10 in premarket trading.

Avon, in a statement on Monday, rejected the offer, saying it substantially undervalues the company.

Avon is searching for a new CEO to replace Andrea Jung, who has held the reins since 1999. Avon has said the new CEO will undertake a top-to-bottom review of the struggling company, which is also dealing with a probe into whether it broke U.S. anti-bribery laws in China.

Avon said that having a new CEO will create a greater opportunity to increase the company's value beyond what Coty is offering.

The company is facing a long decline in sales and the number of sales representatives in the United States. During the holiday period, sales in key emerging markets like Brazil and Russia fell.

Coty said it originally offered $22.25 per share in early March but failed to entice Avon into talks. It said it went public with its latest offer after sending three letters to Jung but failing to draw Avon into discussions.

We do not understand how your Board's unwillingness to discuss our proposal can serve the best interests of Avon's shareholders, Coty Chairman Bart Becht said in letter to be delivered to Jung on Monday.

Coty said it would be willing to raise its offer if Avon can show there is greater value in the company by opening its books. Coty said it is confident it can line up the necessary financing to pull off the deal. Avon's annual sales are three times greater than those of Coty.

Shares of Avon, which is cutting jobs, plunged nearly 50 percent over the last year and a half. The company is worth only about $8 billion today, down from an all-time peak of $21.8 billion in June 2004.

Coty said it would call the new company Avon-Coty. It also said Avon's door-to-door direct sales model would help Coty's beauty brands.

Coty got 57 percent of its $4.1 billion in sales in fiscal 2011 from perfumes, and revenue is still heavily skewed toward the United States and Europe. The company praised Avon's presence in emerging markets, but Avon has seen its position in Eastern Europe and Brazil threatened by competitors.

(Reporting By Phil Wahba in New York; Editing by Lisa Von Ahn and John Wallace)