FASHIONMALL TURNS DOWN GENESISINTERMEDIA OFFER
Byline: Valerie Seckler
NEW YORK — A buyout offer that even an unprofitable dot-com could refuse?
That’s just what Fashionmall.com’s board has decided it received back in December from direct marketer and interactive advertiser GenesisIntermedia.com. The group said Wednesday it had rejected an offer made by Los Angeles-based GenesisIntermedia to acquire the six-year-old virtual mall at $2 per share — far south of the $13 a pop investors paid to take the company public back in 1999 — plus .29 shares of GenesisIntermedia for each share of Fashionmall.
Including the stock component, and based on recent trading prices of GenesisIntermedia, the nixed stock-and-cash deal would have been worth between $7 and $8 per share.
Ben Narasin, Fashionmall’s chief executive officer, declined comment Wednesday on the board’s decision. Narasin did say he and Ramy El-Batrawi, chairman and ceo of GenesisIntermedia, are currently “talking about some sort of strategic alliance,” but the Fashionmall chief did not elaborate.
In Nasdaq trading Wednesday, shares of Fashionmall fell 3 cents to close at $2.16, while shares of GenesisIntermedia gave up 31 cents to end the session at $19.13. Around 179,000 shares of Fashionmall changed hands yesterday, compared with average daily volume of 91,000. Fashionmall’s shares during the past 52 weeks have ranged from a low of $1.25 to a high of $5, notched on Dec. 29.
When GenesisIntermedia first made its merger move back in December, Narasin said Fashionmall was not looking to sell itself, but noted the company’s board would evaluate the proposal. Insiders control 51 percent of Fashionmall, which diminished the likelihood of a hostile tender offer for the dot-com’s shares. GenesisIntermedia has a 7 percent stake in Fashionmall.
The takeover bid by the Los Angeles-based direct marketer closely followed another offer to acquire Fashionmall, also made in December, by Beverly Hills, Calif.-based mergers and acquisition firm, Narax, which had proposed an all-cash deal for a measly $3.50 a share.