By  on August 11, 2009

Revlon Inc. late Monday officially launched the tender offer proposed by majority shareholder Ronald Perelman in April with slightly amended terms.

Revlon said the new tender offer would expire on Sept. 10 and that shareholder lawsuits filed against the company, its directors and MacAndrews & Forbes resulting from the initial proposal had been settled. Steven Berns, executive vice president and chief financial offer of Revlon, told WWD that among the many differences between the offer being launched and the earlier proposal is that the exchange offer is voluntary.

Under the new terms, investors would exchange their Class A shares for newly issued preferred shares on a one-to-one basis and would receive $7.10 in cash payments over the new shares’ four-year term through the payment of 12.75 percent annual dividends, higher than the 12.5 percent originally contemplated. A special cash payment of $1.50 per share would be received after two years, up from the $1 first proposed. The liquidation preference paid at maturity, originally $3.74 a share, was reduced slightly to $3.71.

In the event of a change of control transaction within two years of the shares’ issue, holders would have the right to receive up to $12 a share, including the liquidation preference and any dividends in lieu of the $1.50 special cash payment.

Under the terms proposed in April, MacAndrews & Forbes would forgive $75 million of its $107 million senior subordinated term loan due from its Revlon Consumer Products Corp. subsidiary, while extending its maturity to 2013 and boosting its interest rate to 12.5 percent. The revised offer calls for an interest rate of 12.75 percent.

Among the terms of the offer are that a majority of the Class A shares not currently held by MacAndrews & Forbes are tendered and not withdrawn.

Perelman’s holding company, MacAndrews & Forbes, owns 58 percent of Revlon’s Class A common stock, 100 percent of its Class B common stock and approximately 61 percent of all outstanding shares, representing about three-quarters of the voting power in the company.

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