Parlux, Caremark Takeover Flaps Heat Up
NEW YORK — Two corporate takeover sagas involving Caremark Rx Inc. and Parlux Fragrances Inc., showed no signs of abating Tuesday.
CVS’s high stakes battle with Express Scripts Inc. produced a $25 billion offer Tuesday from Express Scripts for all outstanding shares of Caremark Rx shares.
In CVS/Caremark developments, Express Scripts, which, like Caremark, is a pharmacy benefits manager, is offering Caremark stockholders $29.50 in cash and 0.426 shares of Express Scripts stock for each share of Caremark stock, or $56.87 per share.
The hostile takeover bid represents a 7 percent premium over the current value of the CVS/Caremark merger, according to Express Scripts.
The merger proposal involving CVS and Caremark is an all-stock deal structured so that Caremark shareholders would receive 1.67 shares of CVS for each share of Caremark. CVS stockholders are to own 54.5 percent of the combined company and Caremark shareholders are to own 45.5 percent.
Express Scripts’ exchange offer is set to expire Feb. 13 and CVS expects to complete its merger with Caremark later in the quarter.
Last week, Caremark’s board rejected a $26 billion buyout bid from Express Scripts. A subsequent lawsuit was filed in Delaware in an effort to void a $675 million breakup fee in Caremark’s merger agreement with the drugstore chain.
CVS shares traded down 0.47 percent to close at $31.79 Tuesday, while Caremark saw its shares slip 0.9 percent to $56.30.
Meanwhile, in the other contest, Parlux, based in Ft. Lauderdale, Fla., urged shareholders to reject a proposal by stockholder Glenn H. Nussdorf to, as Parlux contends, “remove without cause all members of [Parlux’s] board of directors.”
Parlux said in a letter to Nussdorf that, while the firm is not for sale, it would consider a “bona-fide” acquisition offer if Nussdorf were to make one. Instead, Nussdorf, who owns about 12 percent of Parlux, plans to oust Parlux’s board and replace the board with five nominees and himself.
Parlux maintained in a letter to shareholders that, “If successful, Mr. Nussdorf would take control of your company without paying you any control premium for your shares.” The firm added, “While the company has been working through some challenges over the past several months, we are optimistic in our core brand portfolio’s growth prospects.”
Parlux shares closed down 1.47 percent, at $6.05, Tuesday in trading on the Nasdaq.
Last week, Parlux, which markets fragrances under such brands as Paris Hilton, Guess, XOXO, Ocean Pacific, Maria Sharapova, Andy Roddick, Baby Gund and Fred Hayman Beverly Hills, reported that second-quarter earnings declined 20 percent on flat sales.
Wal-Mart Unit’s Beauty Shop Makeover
TULSA, Okla. — Beauty is bolder at the prototype Wal-Mart Neighborhood Market that opens here today.
In a redesign of the grocery-drugstore format that may be rolled out to the company’s supercenters, the color and skin care area features curved aisles, brighter lighting with spotlights, backlit pale-blue brand signage and two display towers that showcase the latest products and trends and are topped by photos of models.
“We are continually evolving the format of the Neighborhood Market, and the greatest change is in the health and beauty area,” Pam Kohn, senior vice president of Wal-Mart Stores Southeast division, and head of Neighborhood Markets, said during a preview tour Tuesday. “We listened to the customer and looked at the changing environment and trends and what the customer is looking for.”
What she wants in beauty is a more private shopping experience, said Debbie Hodges, vice president of skin care and cosmetics for Wal-Mart. “We know she’s back here, and we want her to stay longer — to feel comfortable browsing.”
The 39,000-square-foot unit is Wal-Mart’s sixth Neighborhood Market in Tulsa and 112th nationwide. The Bentonville, Ark.-based retailer opens 15 to 20 of the grocery-drugstores each year. Like this one, they are designed for quick, easy shopping.
Beauty is at the opposite end of the store from the entrance. Facing curved aisles are filled with color products by L’Oréal, Maybelline, Cover Girl, Max Factor and Almay and create almost a cocoon-like feeling. Blond wood gives end caps a warm tone and a prominent way to display newer products such as L’Oréal Carbon Black Liners. Little round adjustable mirrors at both ends of the aisles provide shoppers a chance to check their makeup. The color and skin area is about 1,000 square feet — the same size as other markets — and stocks the same brands.
“The beauty business is important to us, and to being a competitive grocery and drugstore,” Kohn noted. “We need to make sure this experience meets [the customer’s] expectations. In a lot of our stores, cosmetics backs up to frozen foods, which is not as inviting as what we’ve created here.”
Two Maybelline artists were on hand to give free makeovers, but the department won’t have a color specialist going forward.
The earthy brown and green palette of other markets has been updated with a brighter green and sparks of other hues, including ocher, plum, periwinkle and pale blue. Big color photographs of products highlight various areas, and department signs are cleanly denoted in silver block letters. Organic and specialty products are highlighted.
The store was well stocked, even though the state of Oklahoma had declared a state of emergency because of a weekend storm that blanketed it in ice and snow.
“Our associates have done a phenomenal job, and many of them are without power,” Kohn said.
— Holly Haber