Revlon again extends offer of new 12¾% preferreds for class A stock

By Jennifer Chiou

New York, Sept. 18 - Revlon, Inc. said it once more prolonged its exchange offer in which each share of its class A common stock may be exchanged on a one-for-one basis for a share of a newly issued series of 12¾% preferred stock.

The offer will now end at 5 p.m. ET on Sept. 24 instead of Sept. 17.

As of the previous deadline, holders had tendered 8,583,248 shares of class A stock.

As of Sept. 10, an even earlier deadline, holders had tendered 8,436,516 shares of class A stock.

The preferreds will have a liquidation preference of $3.71 each and will be mandatorily redeemable four years after issuance. They will be senior in Revlon's capital structure to the common stock and senior in right of payment to Revlon Consumer Products Corp.'s senior subordinated term loan.

As already noted, the company's principal stockholder is MacAndrews & Forbes Holdings Inc. Revlon said that if upon completion of the exchange offer MacAndrews & Forbes is eligible to consummate a merger by reason of its 90% ownership of the outstanding shares of class A common stock, MacAndrews & Forbes will seek to carry out a short-form merger in which the remaining holders of class A common stock will receive shares of the new preferred stock.

If Revlon engages in certain change-of-control transactions within two years of the exchange offer, the holders of the preferreds would have the right to receive a special cash dividend, capped at an amount that would provide holders with total cash payments of up to $12.00 per share, including the liquidation preference and any dividends.

If Revlon does not engage in any such change-of-control transaction within two years, holders of the preferreds would have the right to receive a special cash dividend of $1.50 per share.

In addition, preferred holders will have a one-time opportunity, exercisable not earlier than six weeks nor later than two weeks prior to the second anniversary of the issuance of the preferreds, to convert their shares into shares of a new series of preferred stock in exchange for giving up the right to receive the $1.50-per-share special cash dividend.

The company said the effect of this conversion would be to extend from the second anniversary of the issuance of the preferreds until the third anniversary the preferred holder's right to receive the change-of-control payment, but during such third year capped at $12.50 per share instead of $12.00 per share.

Each preferred will have the same voting rights as a share of class A common stock, except with respect to certain mergers.

The company said that counsel for parties in some Delaware shareholder lawsuits filed against Revlon, its directors and MacAndrews & Forbes in connection with an initial proposal by MacAndrews & Forbes that led to the exchange offer reached an agreement in principle to settle all claims raised by the suits.

The completion of the offer is subject to the receipt of tenders from holders of a least a majority of the class A common stock not beneficially owned by MacAndrews & Forbes and its affiliates. MacAndrews & Forbes will not be tendering any shares.

MacAndrews & Forbes, which is wholly owned by Ronald O. Perelman, beneficially owns about 58% of Revlon's outstanding class A common stock, 100% of its class B common stock and approximately 61% of Revlon's combined outstanding shares of class A and class B common stock, which together represent about 75% of the combined voting power of such shares.

D.F. King & Co., Inc. (800 949-2583) is the information agent.

Revlon makes cosmetics and other personal care products and is based in New York.

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