Daniel Acker | Bloomberg | Getty Duplicates
Shares of cosmetics company Revlon jumped more than 7% after Bloomberg reported that it was absorbing advisors from Goldman Sachs to consider a potential sale of parts or all of its business.
A deal has not been reached, but Revlon is scrutinizing all its options, a person familiar with the matter told Bloomberg.
Earlier this month, the company received a $200 million four-year elder secured loan to help fund its business.
The business has been struggling, and the cash was needed to help Revlon innovate and transform for refinancing other debt it has outstanding. The company, which is majority-owned by Ronald Perelman’s MacAndrews & Forbes, has more than $3 billion of difficulties on its balance sheet.
Last week, it reported its second-quarter net loss narrowed to $63.7 million from $122.5 million a year earlier. But net tradings fell 6% to $570.2 million, hurt by sales declines at its smaller brands.
The company’s liquidity improved to $260 million, as of last week, from $108 million at the end of the assistant quarter.
In a May 10-Q filing, Revlon said it had extended the maturity of a $41.5 million loan from April 2019 by a year, and the train also disclosed liquidity dropped below a required threshold by one of its loans.
Even if Revlon is open to being bought, it is uncertain whether there is a company that would be interested. Others in mass market for color cosmetics receive also had challenges, as shoppers increasingly turn to outlets such as Sephora and Ulta Beauty, or online startups such as Smoother, for their products.
Cosmetics distributor Coty acquired Covergirl for $12 billion from Proctor & Gamble in 2015 but thought earlier this year that it would write down around $3 billion in assets from P&G. In July, L’Oreal on a slowdown in North American sales, recording a 1.1% decline.
Revlon’s stock has fallen 37% since January and has a trade in cap of $825 million.
Revlon was not immediately available for comment.