Revlon Group said Tuesday that it may end up paying more than $40 million to settle claims for backing out of a $905-million deal last year to sell Revlon's cosmetics unit to Beauty Acquisition Corp.
Revlon Group said it already has paid $21.3 million to Equitable Capital Management Corp., Manufacturers Hanover Trust Co. and Bankers Trust Co., to "partially" settle claims arising out of the agreement. The three firms were to have financed the transaction and thus eventually share in the proceeds, according to a Revlon spokeswoman.
Revlon's previous management had agreed to sell the cosmetic business as part of its unsuccessful attempt to thwart a takeover by Pantry Pride of Ft. Lauderdale, Fla. After the takeover, the deal with Beauty Acquisition was scrapped. Beauty Acquisition sued Revlon Group to enforce the agreement and to recover unspecified damages.
The settlement with Equitable Capital, Manufacturers Hanover and Bankers Trust is unrelated to the lawsuit, but Revlon announced Tuesday that it is willing to settle that as well.