Pantry Pride’s Plans for Revlon Still Undisclosed

Pantry Pride confirmed Monday that it has acquired control of Revlon, but it remained quiet on its plans for the cosmetics and health-care concern.

Pantry Pride, which operates supermarkets and other retail stores, said in a terse statement that 27.6 million, or 88%, of Revlon’s 31.5 million common shares outstanding were tendered under Pantry Pride’s $58-a-share offer that expired midnight Friday.

But Roanne Kulakoff, a spokeswoman for Kekst & Co., a New York public relations firm representing Pantry Pride, said the company “was just not commenting at this point” on Revlon’s future.

Assets May Be For Sale

There is speculation on Wall Street that, because Pantry Pride will assume a sizable debt burden in the $1.83-billion acquisition, it will quickly move to sell some of Revlon’s assets.

In addition, Revlon already had agreed to sell its beauty business to Adler & Shaykin, an investment partnership, for $900 million.

That agreement was part of a plan, embraced by Revlon, in which another private investment firm, Forstmann, Little & Co., would have acquired Revlon for $57.25 a share, or $1.8 billion. Once Forstmann, Little had bought Revlon, it then planned to sell the cosmetics business to Adler & Shaykin.

But the Forstmann, Little proposal fell apart Friday when the Delaware Supreme Court upheld a lower court’s rejection of a key defensive tactic that Revlon had tried to use to thwart Pantry Pride’s offer.

As part of its agreement with Forstmann, Little, Revlon granted the firm a “lockup” option to buy two Revlon divisions if another suitor acquired 40% of its stock. The idea was to make the company less attractive and hence to discourage Pantry Pride from pursuing its hostile bid.

Agreement Voided

But the Delaware Supreme Court invalidated the option, agreeing with the lower court that it retarded the bidding process to the detriment of Revlon’s stockholders.

With the court action paralyzing the Forstmann, Little plan, Pantry Pride promptly began buying Revlon shares Friday. Revlon later conceded defeat by saying that its executives would tender their shares to Pantry Pride, which is controlled by the private investment firm MacAndrews & Forbes Holdings.

Revlon spokesman Roger Shelley said Monday that while Revlon executives were disappointed, both companies were “working together to ensure an orderly transition.”