No Final Deal for Genesis, Icahn

GenesisIntermedia Inc. shares fell Friday after the direct-marketing company said it hadn’t yet reached an agreement with investor Carl Icahn for a $100-million line of credit.

The price dropped as much as 7% to $17.44, erasing much of Thursday’s 9.6% surge. The shares had gained on expectations that the company would make a positive announcement. Less than one hour before the trading session ended Thursday, Genesis shares were halted, pending a statement. Trading totaled 971,600 shares, triple its average daily volume.

Genesis shares fell 2 cents to close at $18.75 in trading of 1.4 million shares on Nasdaq after saying it had a “conditional commitment,” though no final agreement to obtain a line of credit from Icahn’s Riverdale to finance acquisitions. Icahn wasn’t available for comment. Shares opened at $25, an all-time high, but fell below $20 within minutes.

According to Friday’s announcement, Riverdale was given warrants and options to acquire 20% of Van Nuys-based Genesis at an undisclosed price, in exchange for providing a “conditional commitment” to finance $100 million of acquisitions for Genesis, and agreeing to provide investment advice.

“Proposing alternative financing sources,” would be one category of advice provided under the agreement.

Robert Bleckman, spokesman for Genesis, declined to provide additional information.

Adnan Khashoggi, the international arms merchant and financier, is the largest outside shareholder of Genesis. He owns 44% of the stock through Ultimate Holdings, a holding company based in Bermuda.

Most of Genesis’ revenue comes from telemarketing and infomercials for products, including Ab Twister exercise machines and tapes with advice on love and personal finance.