FASHIONMALL’S TWO SUITORS
Byline: Peter Braunstein
NEW YORK — The decision of Sitestar Corp., an Encino, Calif.-based Internet holding company, to withdraw its previous bid offer for online retailer Fashionmall.com on Tuesday, has left the bidding war in the hands of Fashionmall’s two other suitors, Narax and GenesisIntermedia.
It has also raised questions about the general flurry of interest in Fashionmall.com.
Sitestar’s original bid, dating back to October, was $3 per share for Fashionmall.com, an offer received less than enthusiastically at the time by the dot-com’s chief executive officer, Ben Narasin. In a statement, Sitestar president and chief executive officer Clinton J. Sallee also addressed allegations that Sitestar was somehow in league with Narax, a Beverly Hills-based mergers and acquisitions firm that last Thursday made a similar bid to acquire Fashionmall.com at $3.50 a share.
“Sitestar will not compete with the aggressive valuations recently announced by other Fashionmall suitors,” said Sallee, referring to both the Narax bid and the latest offer for the e-commerce site tended by Van Nuys, Calif.-based GenesisIntermedia last Friday. “Further, there is no relationship between Sitestar and either of the other two parties that recently announced offers for Fashionmall.com. Beyond their attempts to mimic our efforts, which caught us by surprise, our involvement is nonexistent.”
Sallee’s statement relates to the discovery that Michael Savage, president of Narax, is also president and a board member of a company incorporated in Nevada called TransAmerican Holding, a firm whose former director was Frederick Manlunas, the current chairman of Sitestar. The link between the principals of Sitestar and Narax, both bidders on Fashionmall.com, has fed speculation that someone is attempting to manipulate the Internet firm’s stock.
With Sitestar out of the picture, the most prominent contender in the Fashionmall bidding war is GenesisIntermedia, whose ceo, Ramy El-Batrawi, is eyeing Fashionmall.com as an adjunct to its Centerlinq network of interactive kiosks placed in shopping malls. Under the terms of Friday’s unsolicited bid, GenesisIntermedia offered to pay $2 a share in cash and 0.29 GenesisIntermedia shares for each share of Fashionmall.com. Shares of GenesisIntermedia closed Wednesday at $17.28 on the Nasdaq.
“Fashionmall has acknowledged our offer and we are hopeful that our bid will be accepted,” Robert Bleckman, director of investor relations for GenesisIntermedia, told WWD.
Bleckman also addressed whether GenesisIntermedia’s bid was in any way motivated by Narax’s Thursday bid offer.
“We’ve been following Fashionmall and accumulating shares since last November,” he said. “Narax was only a slight factor. Mostly, we like Fashionmall’s cash position, they’re trading below their cash value, and we’re also looking at the value of their database.”
As to the motivations behind the Narax bid, Bleckman ventured: “Narax, Narasin — who knows?”
“We’ve been looking to acquire Fashionmall since November, and this just accelerated the process,” said chief executive officer Ramy El-Batrawi. “The only reason Narax bid on Fashionmall is for the cash.”
He is referring to Fashionmall.com’s $34 million cash reserve, although GenesisIntermedia’s offer — $15 million in cash and $38 million in stock — is less than half of Fashionmall.com’s current cash reserve.
Neither Fashionmall nor Narax could be reached for comment on these latest developments.