Movie Star also announced that the registration statement filed with the Securities and Exchange Commission in connection with Movie Star's previously announced non-transferable rights offering has been declared effective as of November 29, 2007.
The rights offering will commence on December 3, 2007 and will expire on January 16, 2008 unless extended or earlier withdrawn. Movie Star will distribute to holders of Movie Star's outstanding common stock as of the Record Date, at no cost, non- transferable subscription rights to purchase up to an aggregate of 11,363,636 shares of Movie Star common stock at a subscription price of $1.76 per share.
Record holders of Movie Star's common stock will receive one subscription right for each share of Movie Star common stock held by them as of the close of business on the Record Date. Each non-transferable subscription right will entitle the holder to purchase 0.691417 shares of Movie Star common stock. The number of shares entitled to be purchased by each holder will be rounded down in the aggregate to thenearest whole number.
Movie Star shareholders who fully exercise all rights issued to them will be entitled to subscribe for additional shares of Movie Star common stock at the subscription price pursuant to an oversubscription privilege to the extent that other eligible participants do not exercise their subscription privileges in full.
Fursa Alternative Strategies, LLC (Fursa) and certain funds and accounts affiliated with, managed by, or over which Fursa or any of its affiliates exercises investment authority, including, without limitation, with respect to voting and dispositive rights, Tokarz Investments, LLC and TTG Apparel, LLC, have agreed to act as standby purchasers and purchase directly from Movie Star, at the same subscription price, all shares of Movie Star common stock not subscribed for in the rights offering.
On or about November 30, 2007, subscription certificates evidencing the rights will be mailed to our shareholders of record as of the Record Date, along with the final prospectus describing, among other things, the terms, risks and other important information about the rights offering.
The closing of the rights offering is conditioned on (i) the satisfaction or waiver of the conditions specified in the merger agreement to the filing of the certificate of merger, other than the actual delivery of the various closing documents and (ii) our acceptance of subscriptions, which would occur immediately prior to the merger (and prior to any reverse stock split effected in connection with the merger). The definitive proxy statement will contain important information regarding the closing conditions and the transactions in general.
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