Cosmetic Center to merge Revlon subsidiary will be absorbed

November 28, 1996|By Liz Bowie | Liz Bowie,SUN STAFF

Cosmetic Center Inc. signed a definitive agreement with Revlon Inc. yesterday to merge with a subsidiary of the New York-based cosmetics giant.

Prestige Fragrance & Cosmetics Inc. will be merged into Cosmetic Center Inc., which will retain its name.

The two companies signed a letter of intent Oct. 1.

The Savage-based Cosmetic Center operates 68 specialty retail stores in the mid-Atlantic region and Illinois, and distributes mass-merchandised cosmetics.

"The merger provides us with a broader geographical presence," said Bruce Strohl, chief financial officer of Cosmetic Center.

The merger also will provide efficiencies in functions such as merchandising and warehousing. The merger is expected to be completed early next year.

Under the merger, Cosmetic Center's Class A and Class B shareholders could elect to receive either one share of the company's new Class C voting common stock or $7.63 in cash for each share they hold.

Revlon would receive the new Class C voting shares and could own up to 84 percent of Cosmetic Center's outstanding common shares.

Mark Weinstein, Cosmetic Center's chairman, and his family own about 51 percent of the Class B shares of the publicly held company, which trades on the Nasdaq market. Revlon agreed to buy the Weinsteins' shares.

Prestige Fragrance operates 198 stores in outlet malls that sell surplus and discontinued cosmetics and beauty merchandise.

Pub Date: 11/28/96

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