Revlon Group offered Monday to buy Gillette Co. in a cash and securities transaction worth about $5.4 billion, Revlon's third bid for Gillette in nine months.
Gillette declined to comment on the latest proposal, which was made in a letter to Chairman Colman M. Mockler Jr. But Revlon may not make a formal offer to Gillette shareholders without the permission of Gillette's management under an agreement reached after Revlon dropped its initial takeover offer last November.
Gillette stock jumped $3.25 a share to close at $43.375 in New York Stock Exchange trading.
Revlon offered $45 in cash and securities to be jointly valued at $2 a share by Gillette's and Revlon's investment bankers.
In late June, Revlon offered at least $40.50 per share to acquire the personal products manufacturer in a deal valued at about $4.66 billion. Boston-based Gillette rejected that proposal, as it had the $4.12-billion offer Revlon made in November.
"We remain committed to the belief that a combination of our two companies makes sound business sense," Ronald O. Perelman, Revlon's chairman, said in the letter. "No option available to you as a stand alone company--a recapitalization, a leveraged buyout, a share repurchase program--can compare to a combination with our company."
The offer came the same day Revlon announced that it had sold its Vision Care contact lens and eyeglass business to Britain's Pilkington PLC for about $574 million. That sale was expected to add substantially to Revlon's $1-billion cash reserve.
Gillette has been the object of heavy takeover speculation since Revlon's initial bid last fall, although no other bidders have emerged. At that time, Revlon owned about 14% of the 66.4 million Gillette shares then outstanding and offered $65 a share for the rest.
Gillette thwarted the takeover threat by repurchasing Revlon's shares for $558 million, including $9 million to reimburse Revlon for its expenses, thereby giving Revlon a profit of about $34 million on its Gillette investment.
Gillette also repurchased an additional 10% of its shares from its other shareholders, and later launched a restructuring program to help finance the debt required for the stock buyback.