Perfume maker Parlux Fragrances Inc has announced that on June 20th 2006, the Independent Committee (the 'Committee') of the Board of Directors of Parlux sent a response to the proposal received from PF Acquisition of Florida LLC, which is owned by Ilia Lekach, Chairman and CEO of Parlux, to acquire all of the outstanding common shares of Parlux, pursuant to an offer at a price of $29.00 per share in cash (the 'Proposal') (previously disclosed in Parlux's June 14th 2006 Form 8-K).
Lekach is currently the beneficial owner of 26.2 percent of the common stock of Parlux. Through their legal counsel, the Committee responded (the 'Response') to the offer by stating that the Committee does not believe it is prudent for Parlux to move forward to consider the transaction with the significant financial and other contingencies contained in the Proposal.
Further, the Committee questions the propriety of a proposed break up fee. The Committee believes that if Parlux proceeds with the Proposal and the transaction does not close, it may have a very negative effect on Parlux.
In order to protect Parlux and its shareholders, the Committee believes that the closing contingencies should be removed from the Proposal and Acquisition Co should provide a deposit to the company as evidence of Acquisition Co's ability to proceed and in recognition of the significant cost Parlux will incur in considering the Proposal.
The Committee continues to state that, in the event that the transaction cannot be completed due to an inability by Acquisition Co to obtain financing, the deposit would be used to reimburse Parlux for its costs and expenses in connection with the consideration of the Proposal.
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