Unilever sells minority stake in Elizabeth Arden
closed its offering of about 2.5 million common shares at US$19.50
(€16.14) per share, including over-allotment option exercised by
investment bank Morgan Stanley.
Multinational consumer giant Unilever and its affiliates sold 2.31 million shares, which had represented the remaining shares of common stock underlying Elizabeth Arden's outstanding Series D convertible preferred stock.
No shares of the Series D shares remain outstanding and the company is no longer obligated to pay a 5 per cent dividend on the issue's outstanding liquidation value, said the Miami Lakes-based cosmetics and fragrance company.
Elizabeth Arden said proceeds would be used to reduce borrowings under its credit facility.
The company's shares closed Tuesday at US$20.60 (€17.05), up 35 cents, or 1.7 per cent on Nasdaq.
Unilever had previously disposed of its Elizabeth Arden skin care and fragrances portfolio in late 2000 in order to focus on the development of designer fragrances, although speculation at the time was that it could also be a precursor to the divestment of its remaining premium fragrances business.
The disposal was part of a restructuring that Unilever initiated in 2000, a five-year "Path to Growth" strategy aimed at streamlining operations, that effectively downsized its brand portfolio from 1,600 to 400 "power brands", and divested low-profit yielding businesses, following depressed profits and modest turnover growth, according to Euromonitor.
The strategy's impact on Unilever's cosmetics and toiletries operation was the creation of Unilever Cosmetics International (UCI) to manage a global portfolio of prestige beauty and fragrance brands, including Calvin Klein, Cerruti and Karl Lagerfeld.
