REVLON HAS ONE WEEK TO FIND COUNTER OFFERS TO PANTRY PRIDE's $58 PER SHARE
REVLON HAS ONE WEEK TO FIND COUNTER OFFERS TO PANTRY PRIDE's $58 PER SHARE takeover bid following a Delaware start court action issued Oct. 25. The state court indirectly gave Revlon an extra week by granting a stay to an earlier injunction issued in favor of Pantry Pride. The suitor had sought, and received, an injunction against Revlon's lock-up agreement with Forstmann Little to protect a planned leveraged buy-out. The stay was granted by the court to allow Revlon to prepare an appeal of the injunction to the Delaware Supreme Court. Without the stay, Pantry Pride would probably have begun its $58 per share tender offer. That offer was contingent on the elimination of the lock-up provisions in the Revlon-Forstmann agreement. Forstmann had the right, according to the lock-up, to purchase Revlon's vision care business and clinical labs business for $525 mil. should any third party purchase 40% of Revlon's stock. The Oct. 23 injunction by the Delaware court would have nullified the lock-up agreement. The temporary delay in Pantry Pride's plan gives Revlon time to negotiate a sweetened leveraged buy-out offer or to try to put together some other form of defensive sale or divestiture plan. Revlon already has American Home Products lined up as a buyer for Norcliff-Thayer and a chemical business. The vision care and clinical labs businesses are clearly attractive to outside buyers, and investment bankers are understood to have clients ready for the Rx drug businesses. Before the stay was granted, Pantry Pride Chairman Ronald Perelman described the injunction as "a great victory for shareholders" which "clears the way for Revlon shareholders to participate in Pantry Pride's generous offer." The Delaware high court could accept the Revlon request for a rehearing and schedule a court date as soon as Oct. 31.
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