Perelman Group Mulls Bid For Rest of Cosmetics Concern
NEW YORK (AP) _ Revlon Group Inc.’s biggest stockholder, MacAndrews & Forbes Holdings Inc., said Friday it is weighing a bid to take Revlon private in an acquisition valued at about $715 million.
MacAndrews & Forbes, a private holding company led by Ronald O. Perelman, who also is Revlon’s chairman, said it was considering making a cash offer to buy the 65.4 percent of Revlon it does not already own for $18.50 a share.
The announcement sent the cosmetic giant’s stock sharply higher in heavy trading despite MacAndrews & Forbes’ warning that there was no assurance the purchase would be completed on the terms suggested.
The stock jumped $3.50 a share to $18.25 in New York Stock Exchange composite trading, and led the Big Board’s most-active list on volume of nearly 5 million shares.
One of MacAndrews & Forbes’ former holdings, supermarket operator Pantry Pride Inc., acquired Revlon for $1.83 billion in late 1985 and the newly merged company adopted the Revlon name.
The deal also gave MacAndrews & Forbes control of about 20.4 million, or 34.6 percent, of Revlon’s 59 million common shares and equivalents outstanding.
MacAndrews & Forbes said specific terms of its potential Revlon bid had not yet been determined, and that the offer would be subject to the company securing the necessary financing.
But Revlon’s board was told to expect a formal proposal ″in the near future,″ MacAndrews & Forbes said.
There were rumors a month ago that Perelman would bid for the rest of Revlon, and analysts said the announcement Friday was not entirely unexpected.
Nancy Hall, an analyst with Smith Barney, Harris Upham & Co., said that in view of MacAndrews & Forbes’ private status, it ″was a given that going private was always part of the story″ suggested for Revlon’s future following its purchase by Pantry Pride.
After that merger Revlon decided to concentrate on its widely known cosmetics operation, a vision-care business and clinical diagnostic laboratories. Since then it divested or agreed to sell other assets such as Revlon’s pharmaceutical and diagnostic equipment lines, and Pantry Pride’s supermarkets and drug stores.
Also during 1986, Perelman used Revlon and MacAndrews & Forbes to launch or threaten takeover bids for three other big companies: CPC International Inc., Transworld Corp. and Gillette Co.
None of the bids succeeded but Perelman and his affiliates made sizable profits from their stock holdings in those companies.
Revlon also completed some acquisitions in 1986. The company purchased Frigitronics Inc., an eye-care products concern, for $114 million. Revlon also bought the Max Factor, Almay and Halston cosmetics, fragrances and toiletries businesses from Playtex Holdings Inc. for $345 million.
Revlon has yet to release its fourth-quarter 1986 results. But in the first nine months of the year, it earned $26.8 million, or 18 cents a share, on sales of $1.24 billion.
MacAndrews & Forbes, which Perelman took private in 1983, has a range of interests including cigars, candy and videocassettes. The company also owns Technicolor Holdings Inc., a leading film processor for the movie industry, and an 8 percent stake in Tri-Star Pictures Inc., a movie studio and theater owner.