Home Uncategorized “Many, Many States Have Explicitly Rejected Revlon”: With Revlon for Sale, Ron…


“Many, Many States Have Explicitly Rejected Revlon”: With Revlon for Sale, Ron…

by Ace Damon
“Many, Many States Have Explicitly Rejected Revlon”: With Revlon for Sale, Ron...

But who knows him best says he made money from Revlon. (Neither Perelman nor his spokesman would comment, given the ongoing sales process.) It is known that after he paid Revlon $ 2.7 billion in 1985, he turned around and sold the non-business. company cosmetic by $ 1.4 billion. He made the company public, sold stock, and bought more stock over and over and over. According to the company's proxy statement of 2019, registered with the Securities and Exchange Commission, Perelman owns about 87% Revlon stock. Revlon's equity is now worth about $ 1.2 billion, although Revlon today is a very different company from what Perelman bought 34 years ago. Its participation is worth about $ 1 billion. It is also interesting to note that Perelman appointed his then 44-year-old daughter Debra to the position of Revlon CEO in May 2018.

Another fact is that Perelman's considerable fortune was not earned by Revlon's property. His biggest victories came from selling his group of television broadcasters for News Corp. to create what today is the Fox News Channel, and to buy and sell a number of savings and loans, including a big California economy that he and some smart investors bought in the 90s and sold to Citigroup for $ 5.8 billion.

But what about the Delaware court ruling? Has Revlon Mode, as a cool concept, done as well as Perelman in the last 34 years? This is a question I ask H. Rodgin Cohen, senior president of Sullivan & Cromwell, Wall Street's leading law firm. Cohen was not involved in the 1985 battle of Revlon – few were still around – but he is an incisive legal mind and over the years has thought hard about what Revlon Mode means today for corporate boards.

What is clear, Cohen tells me, is that over the years, corporate boards have regained much of the authority that Perelman's historic legal victory has made them lose. Revlon's legal precedent does not apply to share-by-share transactions, or where the vast majority of the consideration offered to shareholders is stock – as in the pending merger between CBS and Viacom or the complete merger between Disney and Fox, for example – because these can be characterized as strategic imperatives. "This is not seen as a sale," says Cohen, "but as a" continuation. " It is also the case today that most states have “constituent statutes” that give boards of directors considerable latitude when considering the opinions of a company “Major constituents” as well as shareholders in deciding who to sell a company to . "Based on these statutes and case law, many states explicitly rejected Revlon," he says.

Cohen says Revlon Mode currently only applies to a "real sale" of a company and only in industries that are not heavily regulated – such as financial services, insurance or telecommunications – or subject to antitrust considerations. In these types of situations, he says, boards often have the right to consider not only the price offered, but also whether regulators or promoters may step in to try to block the sale. “You could reasonably assume, if reasonably taken, that the regulatory hurdles are such that a $ 75 per share offer, which is much more likely to be fulfilled than a $ 80 per share offer, less likely – $ 75 exceeds $ 80, ”explains Cohen. "Now again, at some point the spread is so big you can't beat it."

Another escape valve for boards over the years has been developed in what is known as the “no-shop provision”. In other words, if a company reaches a sale agreement with a buyer but does not include any legal provisions that prevent another bidder from coming up with a higher bid, boards may get protection from having to sell to the highest bidder. or getting involved in a long-range selling process. In this example, another bidder could appear, offer a higher price and potentially disrupt the first deal without the board being legally criticized. “Where Revlon comes in a lot,” he says, “is whether you need to buy the company to determine the best price reasonably possible. The general perception is that you do not, as long as there are no significant obstacles against someone who comes over the top. "

. (tagsToTranslate) revlon (t) ronald perelman


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