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Last Update: 27-Dec-11 09:51 ET
Parlux Fragrances Trading 76% Higher On M&A News
Parlux Fragrances (PARL) is trading 76% higher after the company and Perfumania (PERF $15.25 -4.45) announced Friday that they agreed to a proposed merger that values shares of PARL stock at between $7.91 and $8.55.
On Friday, the company announced that they have signed a definitive merger agreement under which Perfumania would acquire all of the outstanding shares of Parlux in a transaction valued at ~$170 mln, based on Perfumania's closing stock price of $19.55 per share on December 22, 2011.
Based on that Perfumania stock price and depending on the stockholder elections described below, the merger agreement values a share of Parlux stock at between $7.91 and $8.55, assuming no adjustments under the merger agreement other than such elections. Parlux's closing market price on December 22, 2011 was $3.40 per share, and there were ~20.7 mln shares of Parlux common stock outstanding on that date.
Parlux stockholders will be entitled to elect between mixed stock and cash consideration and principally stock consideration under the merger agreement. Financing for the cash portion of the merger consideration and transaction-related expenses is expected to be provided by a combination of additional borrowing of up to $43 mln under Perfumania's senior secured credit facility and, on a subordinated basis, of $30 mln from family trusts of the Nussdorf family. Under the terms of the merger agreement, Parlux may solicit acquisition proposals from third parties for 30 days from the date of the merger agreement and may at any time respond to unsolicited proposals that the Parlux Board of Directors determines are reasonably likely to result in a superior proposal. The merger agreement provides Perfumania a customary right to match any superior proposal.
On Friday, the company announced that they have signed a definitive merger agreement under which Perfumania would acquire all of the outstanding shares of Parlux in a transaction valued at ~$170 mln, based on Perfumania's closing stock price of $19.55 per share on December 22, 2011.
Based on that Perfumania stock price and depending on the stockholder elections described below, the merger agreement values a share of Parlux stock at between $7.91 and $8.55, assuming no adjustments under the merger agreement other than such elections. Parlux's closing market price on December 22, 2011 was $3.40 per share, and there were ~20.7 mln shares of Parlux common stock outstanding on that date.
Parlux stockholders will be entitled to elect between mixed stock and cash consideration and principally stock consideration under the merger agreement. Financing for the cash portion of the merger consideration and transaction-related expenses is expected to be provided by a combination of additional borrowing of up to $43 mln under Perfumania's senior secured credit facility and, on a subordinated basis, of $30 mln from family trusts of the Nussdorf family. Under the terms of the merger agreement, Parlux may solicit acquisition proposals from third parties for 30 days from the date of the merger agreement and may at any time respond to unsolicited proposals that the Parlux Board of Directors determines are reasonably likely to result in a superior proposal. The merger agreement provides Perfumania a customary right to match any superior proposal.
