Parlux gives go ahead to privatize the company
buy back the company shares at $29 in a bid to take the company
private and fend of the threat of short-term investors.
The announcement follows what Lekach terms 'disruptions' from short sellers, which he claims have damaged the company's investment potential.
This has led the company's share price to tumble by more than 50 per cent on the New York Stock Exchange during the course of the last three months.
Yesterday the company's shares closed at $19.47, with the share price continuing to fall heavily on the back of the announcement to buy back.
Lekach is proposing to buy back the company shares through his company PF Acquisitions of Florida in a deal that values it at around $360m.
The company, which has built its names on the back of branded fragrances such as the Paris Hilton collection and the Guess name, had been a star industry performer last year.
Savvy sponsorship deals and en excellent marketing machinery had helped to grow sales by 20 per cent to reach $100.4m, representing a $10.8m net profit.
But despite sales continuing to climb at even faster rates this year, the company's fortunes on the financial market have not proved to be so impressive in recent months, a point that the buy back hopes to address.
Parlux says that the offer is now being considered by a special committee of independent directors from the Parlux board.
As Lekach's offer represents a 55 per cent premium on the current share price, financial experts believe that the offer will have a positive reception and that there is unlikely to be a competing offer.
Parlux directors have already taken the measure of canceling its investor meeting, scheduled for June 23, in an effort to give its board members more time to reflect on the offer.
On June 13 Parlux released its unaudited financial results for the year 2006, which confirmed the company's continued strong performance.
The results showed that company's sales have increased 82 per cent to reach $182.2m, whereas net income has jumped 109 per cent to reach $22.5m.
At the time the company said that it would not be able to file the audited results because the company's administrative operations had not managed to expand at the same rate as its other business operations.
