Perelman Plans to Sell One or More of Revlon’s Businesses
After two weeks of rumors that sent Revlon shares soaring, billionaire Ronald O. Perelman put the cosmetic company’s future up in the air Wednesday, announcing plans to sell one or more of its struggling businesses.
Revlon, which makes Revlon and Almay makeup, Flex shampoo and Charlie perfume, has seen its shares surge 70% in the last two weeks amid rumors the company was a takeover target.
“It’s much more likely they would sell the whole company,” said Tim Drake, a senior equity analyst at Banc One Investment Advisors, which owns about 350,000 shares of Revlon. “The true value of the company is in the Revlon brand and the Revlon name.”
Speculation about potential bidders has included Unilever, the maker of Calvin Klein and Elizabeth Arden cosmetics and fragrances, and Procter & Gamble Co., which owns the Max Factor and Cover Girl lines.
Revlon did not elaborate on its plans, and spokesman Walter Montgomery said, “It’s premature to speculate on any specific course of action.”
The money from any deal would be used to pay down Revlon’s $1.66 billion in debt, much of it borrowed when Perelman bought the firm in 1985 for $1.83 billion.
Revlon, which uses celebrities to hype its products, is a dominant player at cosmetic counters in drugstores and discount stores.
The news that Perelman has hired two investment banks to explore options for Revlon buoyed investors Wednesday. Revlon’s stock rose $3.56, or nearly 18%, to close at $23.56 on the New York Stock Exchange.
