Revlon Bids $4.16 Billion to Purchase Gillette Co.

New York financier Ronald O. Perelman had a big day Friday: His Revlon Group launched a $4.16-billion attempt to take over Gillette Co. and separately agreed to buy the Max Factor, Almay and Halston cosmetics and fragrance lines from Playtex Holdings.

Besides those moves to blend some of the biggest names in beauty and personal-care products, Perelman also called off a hostile takeover bid for Transworld Corp. in exchange for an option to buy Hilton International hotels.

If he is successful in his various purchases, Perelman will add significantly to the diverse holdings that the 43-year-old takeover artist has been accumulating since he left his father’s steel-fabricating business in Philadelphia eight years ago to strike out on his own.

“Perelman is a deal-maker,” said Nancy Hall, an analyst that follows Revlon and Gillette for Prudential-Bache Securities. “What he’s shown he can do successfully is strip companies and keep what he wants.

“He’s not an operating guy--he hires people to do that. He completes deals, and he makes money.”

Company With ‘Rich Tradition’

On Friday, Perelman began his biggest takeover effort ever with the $65-per-share tender offer for Gillette.

“We have commenced this offer because we believe that Gillette is a fine company with a rich tradition of quality and excellence,” Perelman said in a letter Friday to Gillette Chairman and Chief Executive Colman M. Mockler Jr. “We believe the combination of Revlon and Gillette and their recognized products could provide for dynamic areas of growth and expansion.”

Revlon already owns 9.2 million shares, or nearly 14%, of Gillette’s outstanding common stock.

Gillette’s only response was to advise shareholders to refrain from tendering their shares to Revlon while company directors “carefully consider” the offer. The board will reach a decision “in a timely manner,” although a Gillette spokesman could not say when the board would take up the matter.

Wall Street apparently expects Gillette to fight the takeover because the stock price closed above Revlon’s offering price. Gillette’s stock was the second-most-active issue on the New York Stock Exchange, rising $10 to close at $67.75. Nearly 7.2 million shares changed hands.

“Now the pressure is on Gillette to see what they can do,” said Deepak Raj, an analyst with Merrill Lynch.

Among other things, analysts said, Gillette could seek an ally to buy it, or it could arrange a restructuring of the company. A leveraged buyout by company management is not likely because Gillette’s stock price is too high, they said.

The $65 price is fair but could well go higher if a bidding war begins, said Daniel J. Meade, an analyst with First Boston Corp. The value of the company if broken up ranges from $65 to $70 a share, Raj said.

Perelman’s bid for Gillette is being carried out through a partnership of Revlon Group and MacAndrews & Forbes, Perelman’s mini-conglomerate. MacAndrews & Forbes was originally a producer of licorice extract and chocolate, but under Perelman it has acquired such companies as Technicolor (which owns 40% of Burbank-based Compact Video) and Consolidated Cigar.

Revlon Group--what’s left over from the 1985 takeover by Perelman’s Pantry Pride supermarket firm--sells beauty and vision-care products and operates a chain of clinical laboratories.

A merger of the two companies “is great for Revlon,” said Janet Mangano of Gruntal & Co. “I don’t know how great it is for Gillette.”

Separately, Revlon announced Friday that it signed a definitive agreement to buy the Max Factor, Almay and Halston lines for $345 million. The transaction, which is expected to close in early December, is subject to Playtex completing the purchase of the personal consumer products operations from BCI Holdings, which includes the businesses that Revlon is buying.

Also on Friday, Revlon and MacAndrews & Forbes ended their hostile takeover of Transworld Corp., whose board of directors has adopted a liquidation plan to sell or spin off the company’s businesses and distribute the proceeds to shareholders.

GILLETTE AT A GLANCE The consumer products company headquartered in boston, was founded in 1901 by King C. Gillette, who conceived the idea of a safety razor at his home in Brookline, Mass. Today, the compnay’s products include Gillette razors and blades, White Rain shampoo, Aapri skin care products, Jafra cosmetics, Dry Idea deodorant, Paper Mate and Flair pens, Braun appliances and Oral-B toothbrushes.

9 mos. Year ended Dec. 31 Sept. 30 1985 1984 1983 Revenue (billions) $2.0 $2.4 $2.3 $2.2 Net Income (millions) 140.1 159.9 159.3 145.9

Assets:$2.4 billion Employees:31,400 Shares outstanding:63.9 million 12-month price range:$33.75-$67.75 Friday close (NYSE):$67.75, up $10.00