Revlon Says Deal to Sell Cosmetics Unit Is Ended
Revlon Inc. said Thursday that it has scrapped an agreement to sell its cosmetics division to Adler & Shaykin for $905 million because the private investment firm failed to attend a meeting to complete the acquisition.
However, Adler & Shaykin blamed Revlon, which was acquired by Pantry Pride Inc., for the failure to close the deal and said it would pursue a lawsuit seeking to compel Revlon to sell the division.
It was the latest twist in the breakup of Revlon, which was acquired in a hostile, $1.85-billion takeover in November by Pantry Pride, a Florida-based supermarket chain that indicated it wanted to keep the beauty division.
Part of Takeover Defense
Revlon had agreed to sell the division to Adler & Shaykin as part of its attempt to fend off a takeover by Pantry Pride through a friendly acquisition deal with Forstmann, Little & Co., another New York investment firm.
A Delaware court annulled the Forstmann, Little deal on grounds that it blocked the bidding process to the detriment of Revlon stockholders, and Pantry Pride won control of Revlon.
Adler & Shaykin later sued to enforce its part of the deal, claiming that Pantry Pride was illegally blocking it.
Howard Gittis, a spokesman for Revlon, said Adler & Shaykin representatives did not appear Thursday at a scheduled closing, and “as a result of Adler & Shaykin’s failure, the acquisition agreement of its terms has terminated.
No Longer for Sale
“There’s been a variety of contractual disputes between us for some time. Those disputes have not been resolved,” he said.
Asked if this meant that the beauty division was no longer for sale, he said: “That’s right.”
Leonard P. Shaykin, a partner in the investment firm, said in a statement: “The closing of the transaction is not going forward today because Revlon has not performed in accordance with the terms and conditions of the agreement.”
Shaykin said the firm intended to “press vigorously” the lawsuit to enforce its acquisition of the beauty division. The suit was filed in state court in Delaware, where Revlon was incorporated.
The investment firm referred all queries to its public relations firm, Hill & Knowlton, which did not go beyond Shaykin’s statement.
Pantry Pride has contended that it is not bound by Revlon’s contract with Adler & Shaykin. Pantry Pride’s executive office in Fort Lauderdale, Fla., said all comments about the dispute would come from Gittis’ New York office.
The supermarket chain has agreed to sell Revlon’s prescription drug unit to the pharmaceutical company Rorer Group Inc. for $690 million in cash and sell two other Revlon health care units, Norcliff Thayer and Reheis Chemical, to the British firm Beecham PLC for $395 million.
Earlier Thursday, Revlon announced that its stockholders had formally approved the merger of Revlon into Pantry Pride.
