Physicians Formula (FACE) and Markwins Amend Merger Agreement
Nasdaq:FACE) announced the declaration of a one-time special dividend to stockholders and that Physicians Formula, Markwins International Corporation and Markwins Merger Sub, Inc. entered into an amendment to the agreement and plan of merger previously entered into by the parties under which Markwins would acquire Physicians Formula via a merger.
In connection with the negotiations of the amendment to the merger agreement, Markwins agreed to waive the restrictions in the merger agreement on the payment of a one-time special dividend by Physicians Formula to its stockholders. As a result, on November 15, 2012, the board of directors of Physicians Formula declared a one-time special cash dividend of $0.035 per share payable on December 5, 2012 to stockholders of record as of November 26, 2012. The board of directors sought the waiver to pay the dividend in order to provide compensation to stockholders for the delay of up to one month in the closing of the merger and for the time value of money associated with such delay.
Under the terms of the amendment to the merger agreement, the closing of the merger is scheduled to occur no later than December 13, 2012, and Markwins agreed to waive certain conditions to closing that would have been required to be satisfied at the closing. Markwins also agreed to increase the amount of the termination fee that Markwins will be required to pay under certain circumstances if the merger does not close by December 13, 2012 from $3.5 million to $4.5 million. The sole shareholders of Markwins guaranteed the payment of the termination fee, if payable.
Physicians Formula stockholders adopted the merger agreement on November 8, 2012, and as a result, the closing of the merger was to occur no later than November 14, 2012. Markwins subsequently informed Physicians Formula that although the equity and debt commitment letters Markwins received in connection with the signing of the merger agreement remain in full force and effect, notwithstanding the availability of the financing represented by such commitment letters, Markwins is pursuing alternative financing with more favorable terms.
About Physicians Formula Holdings, Inc. – FACE
Physicians Formula(FACE) is an innovative cosmetics and skin care company operating in the mass market prestige, or “masstige,” market. Under our Physicians Formula brand name, created in 1937, we develop, market and distribute innovative, premium-priced products for the mass market channel. FACE addresses skin imperfections through a problem-solving approach, rather than focusing on changing fashion trends. Currently, FACE products are sold in over 25,000 stores including those operated by Wal-Mart, Target, CVS and Rite Aid.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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