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Revlon mulls asset sales
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April 7, 1999: 1:04 p.m. ET
Cosmetics maker seeks buyers for business lines; all of Revlon for sale?
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NEW YORK (CNNfn) - Revlon Inc., the cosmetics maker whose sinking stock price has made it a takeover target, appeared to give in Wednesday and put itself up for sale.
The company, controlled by billionaire Ron Perelman, said it began a "review of strategic alternatives" including the "possible sale of one or more of the company's businesses" to "maximize shareholder value" and help repay debts.
Translation? Analysts said all of Revlon could be for sale for the right price, though it may yet just sell assets and not the whole company. New York-based Revlon said there was "no assurance" that any sales will occur.
Revlon stock, 83-percent owned by Perelman, rose last month on market rumors that Unilever PLC (UL) or another suitor may buy the company. Revlon (REV) jumped again Wednesday, adding 3 to 23 in New York Stock Exchange trading.
But it remains far below its level of about 55 a year ago as profits have been hurt by product delays, weak sales overseas and stiff competition in the mass market cosmetics business. Revlon, which has lost money in two of the last four years, had a loss of $91 million, or $1.79 a share, last year excluding extraordinary items as sales slid about 6 percent to $2.25 billion.
Analysts said Unilever may want all of Revlon, whose products include Revlon and Almay cosmetics and Charlie perfume. The huge British-Dutch consumer products company and Revlon make a good fit, they said.
"There is a definite possibility the entire company will be sold," a senior analyst's assistant at NationsBanc Montgomery told CNNfn, noting the stock's weakness has made Revlon a takeover target.
He said buying Revlon would put Unilever into the mass market cosmetics business while Procter & Gamble (PG), another potential suitor, already owns CoverGirl and Max Factor, mass market brands that might make a deal tougher to get by regulators.
Officials at Unilever and Procter & Gamble declined to comment.
Revlon spokesman Walter Montgomery said any asset sales would be aimed at boosting the stock price and repaying debt, noting Revlon owed about $1.7 billion at year-end. He declined to say if the whole company might be sold.
Unilever makes Calvin Klein cosmetics, Lipton tea, Vaseline ointment, Wisk detergent and other products. Cincinnati-based Procter & Gamble, in addition to its cosmetics lines, markets Ivory soap, Crest toothpaste, Pringles potato chips and other consumer goods.
Revlon has hired investment bankers Goldman Sachs and Lazard Freres to assist in its review.
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Revlon Inc.
Unilever
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