Revlon says it's in talks to sell

Statement issued after Coty rejects debt-laden company

Cosmetics

July 27, 1999|By BLOOMBERG NEWS

NEW YORK -- Revlon Inc., the cosmetics maker controlled by billionaire financier Ronald Perelman, said yesterday that it is in talks with potential buyers for all or part of the company.

Revlon issued the statement after the Financial Times of London said fragrance maker Coty Inc. decided not to bid for the company. Revlon shares fell $4.75, or 18 percent, to $21.50 yesterday.

Revlon, whose namesake Revlon cosmetics brand is the No. 1 seller in U.S. discount stores and drugstores, hired Goldman Sachs & Co. and Lazard Freres & Co. in April to advise it on a possible sale of businesses to boost its stock price and repay debt. That review of alternatives continues, Revlon said yesterday.

"My suspicion is, it's just too much for Coty, given all the debt," said Melissa Grant, an analyst with Warburg Dillon Read.

Closely held Coty may still be interested in some brands, particularly the Revlon brand, the Financial Times reported.

Coty declined to comment on the report, which said Perelman now might have to sell Revlon piecemeal in order to repay $1.7 billion of debt left from financing his 1985 buyout.

Grant still rates Revlon shares a "buy" and says the company's parts could be sold for a price "in the low 40s" per share. Its other brands include Almay and Ultima II.

Revlon's brands are facing new competition in the United States this year from Procter & Gamble Co.'s Oil of Olay cosmetics and Johnson & Johnson's Neutrogena cosmetics.

Last month, Revlon's share of sales in U.S. discount, drug and grocery stores was 25.5 percent, down 4.7 percentage points from a year earlier.

Pub Date: 7/27/99

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