Parlux Fragrances Inc.’s $170 million sale to Perfumania Holdings Inc. was completed April 18 after a Delaware Chancery Court judge rejected shareholders’ efforts to block it, according to documents made public today.
Investors in Fort Lauderdale, Florida-based Parlux sued claiming directors should have sought higher bids for the maker of celebrity brands including Paris Hilton perfume.
Directors “did negotiate presumably what they believed was the best value available,” and, “Where there is no other bidder and no coercion, an injunction risks stripping the stockholders of their choice to realize a premium on their shares with little corresponding benefit,” Judge Sam Glasscock said in a just-released April 5 telephone-ruling transcript.
Parlux announced Dec. 23 it would sell the company to Perfumania, of Bellport, New York, according to a company statement at the time. Under terms of the sale, Parlux investors received $4 in cash plus 0.20 share of Perfumania or 0.53333 of the buyer, for each share they owned.
“We are pleased with the strong support that both Perfumania and Parlux shareholders gave this transaction and are excited about the opportunity to create additional value for our shareholders, vendors, customers and employees,” Mike Katz, Perfumania’s president and chief executive officer, said in a statement after the buyout.
The case is Dias v. Purches, CA 7199, Delaware Chancery Court (Wilmington).