Sale of $ 170 million of Parlux Fragrances Inc. (PARL) at Perfumania Holdings Inc. (PERF) should be blocked because the administration of Paris Hilton perfume manufacturer did not seek a higher bid, said a lawyer for the shareholders of Parlux.
Council of Parlux also failed to disclose that Perfumania threatened officials begin a proxy battle unless the offer has been accepted, the Attorney Donald j. Enright said Delaware Chancery Court Judge Sam Glasscock.
Administrators "ceded to pressure" after having been threatened by Perfumania, Enright said at a hearing today in Georgetown (Delaware). A Special Committee was appointed following the threat only evaluated the proposal and did not solicit offers of other buyers and did not block the cash option which had been part of an offer earlier.
Glasscock said that it would be to "cure quickly" and that he told the lawyers that he could issue a written notice of next week or a decision of the Court.
Parlux based in Fort Lauderdale, Florida Announces December 23 that it would sell the company at Perfumania, which operates a chain of perfume shops about 360, in a deal then valued at $ 170 million, according to a statement from the company.
"The value of this transaction has fallen very, very significantly since it was announced,"Enright said Glasscock."" Enright said that the price had "declined by approximately $ 50 million" worth a total of $ 120 million, based on the price of the shares recent the Perfumania.
Under the terms of the sale, Parlux investors can choose to receive $4 in cash, plus 0.20 share of Bellport, New York - based Perfumania or 0.53333 of the purchaser, for each share they own. Perfumania reached $10.32 percent 12 to 15: 45 in Nasdaq Stock Market trading. Parlux has lost a cent to $5.64 to 15: 45 in Nasdaq Stock Market trading.
The agreement would give Perfumania controls its largest trading partner and the manufacturer of brand perfumes famous singers of pop including Rihanna, Kanye West and Jessica Simpson.
Counsel for the Commission of said Parlux Glasscock today that they had an "active Committee" assess the offer.
"It would be a futile exercise to" society "go out and he new shop;" Alvin b. Davis, "the buyer is here," said Glasscock.
He said no other bidders have emerged for the company because the 'giant of Perfumania his head' recognized market suspended above and hazards that may result from a spurned as your largest customer purchaser.
Parlux and Perfumania official had asked Glasscock for the costume of Delaware, filed by the shareholder Parlux Jose Dias, pending, while similar combinations continue in the Court of the State of Florida. Glasscock denied this request earlier this month.
"I see nothing that indicates that this question should be suspended out of respect for the action of Florida," said Glasscock. "On the contrary, the interest in this State in the behaviour of the Trustees for its corporate citizens convinces me" to allow the prosecution to proceed, the judge added.
Counsel for media has been argued before a court on March 14 filing than Parlux administration fear to requests for Glenn Nussdorf, President of the Perfumania, sell the company, or that they face a fight on the seats of the Board of Directors.
"It seems that the threat of Mr. Nussdorf had the effect desired," Enright said in Court today.
Nussdorf, which owns 11 per cent of the shares of Parlux, placed two members to the Board of the company have expressed interest in the purchase of the manufacturer of perfume in 2006, media lawyers said in the filing.
"Any time the Commission has or the Special Committee discuss although must communicate with other contenders potentially interested parties for a market company check," counsel for the investor in the documents of the Court on 14 March.
"The idea that they were indebted to Nussdorf is mischievous and unjust," said Davis. "He was appointed because he was competent, not objectivity" he added, making reference to Anthony Agostino, one of the members of the jury selected by Nussdorf.
The case is Dias v. Purches, CA 7199, Court of Chancery of Delaware (Wilmington).
To contact the reporter on this story: Michael Bathon in New York at the mbathon@bloomberg.net
To contact the editor responsible for this story: Michael Hytha to mhytha@bloomberg.net.
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