Revlon Plans Initial Public Offering in ’96 : Cosmetics: Announcement comes on heels of successful launch of competitor Estee Lauder.

Cosmetics giant Revlon Inc., taking its cue from the highly successful public launch by competitor Estee Lauder Cos., said Monday it plans to hold an initial public offering early next year.

Investor Ronald Perelman, who owns 100% of Revlon through the holding company MacAndrews & Forbes, will retain control of the company.

Analysts are already predicting the issue will be a hit and said Revlon, one of the largest U.S. cosmetics companies, is in better shape than in 1992, when plans to take it public were shelved.

“The company is a premium brand name and well-recognized brand names always have a market in the investment community,” said Manish Shah, editor and publisher of the IPO Maven.

Founded in 1932 by Charles Revson and Joseph Lachman, Revlon has grown into one of the world’s best known names and sells its products in about 175 countries under brands such as Revlon, Almay, Ultima II, Charlie and Colorama.

In 1994, it launched ColorStay lipstick, which boosted Revlon’s lipstick market share. During the first nine months of 1995, ColorStay had a 12.9% share in the U.S. self-select distribution channel, the IPO prospectus said.

Revlon said that it will offer an undisclosed number of Class A common shares, which it estimates would raise $150 million.

Revlon will, for tax reasons, be consolidated within MacAndrews & Forbes Holdings. MacAndrews, which is owned by Perelman, will be able to elect the board and control votes on matters submitted to shareholders, the prospectus says.

Analysts said Estee Lauder’s offering has made investors hungry for cosmetics firms, since the last player to go public was Maybelline Inc. in 1992.

“The Estee Lauder IPO is a good sign for Revlon,” said David Menlow, president of IPO Financial Network Corp. But he noted that the companies focus on different markets. “It’s the working girl [Revlon] vs. high fashion [Estee Lauder],” he said.

Estee Lauder, which produces more upmarket products, offered 14 million shares on Friday priced at $26 per share. The stock was trading at $32.875 late Monday.

Shah said Revlon should also benefit from a turnaround in its business. “Their financial condition is the best in the last three years and their business has turned around.”

Revlon posted a net loss of $98 million in 1994 on sales of $1.7 billion, compared to a $145-million loss in 1993 and a loss of $227 million in 1992. For the first nine months of this year, the net loss totaled $45 million.

Analysts said the company will also benefit from the success of ColorStay. “Maybe they are looking to ride on the coattails of that,” said Michael LaTronica, director of research at Gruntal & Co.

Revlon has gathered a bumper team of underwriters, with Merrill Lynch & Co. and CS First Boston at the helm.

The proceeds will be used to repay debt under a term loan facility, a revolving credit facility and a multicurrency facility. Revlon said its total debt stands at $2.2 billion.

Analysts said Revlon is likely to refinance its debt after the offering.

“What the IPO is going to ensure is a host of other offerings and other financing,” Menlow said. “The company will have a definable worth, which will make things more clear if they want to come up with convertible bonds.”

Revlon could not say when the offering would take place but industry sources said it would be a difficult task to get the offering to the market before year-end and Revlon will probably have to wait until early 1996.