Fashionmall.com Finds Narax Buyout Offer 'Suspicious'
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Narax Inc., a Beverly Hills, Calif.-based merger-and-acquisition firm, has offered to acquire Fashionmall.com but the fashion apparel and accessories e-tailer isn't exactly jumping for joy.
On Thursday, Narax disclosed it has sent a letter to Fashionmall.com management offering to acquire the company for $3.50 a share -- an amount substantially above today's trading price of 2 19/32 per share.
But, Friday morning Benjamin Narasin, CEO of fashionmall.com, indicated that he is skeptical of the company and its offer.
In a published statement, Narasin reported that the only communication regarding the acquisition was sent via a fax machine. The offer included the following sentence: "Please note that this communication describes a non-binding proposal and does not constitute a binding offer."
"I believe that any one who was truly serious about acquiring us would have wanted to have discussions with us first," said Narasin, who noted that a preliminary investigation had failed to turn up any information about Narax.
In a published statement, Michael Savage, president of Narax Inc., said, "I believe fashionmall.com is an extraordinary opportunity that could be developed with the help of its management and has the potential to expand into overseas markets. I hope its management will support the terms of the deal, as our offer is at a substantial premium to the current market price."
Narasin further scrutinized the offer by noting that a similar bid for fashionmall.com was made by Sitestar in October and that nothing ever came of it.
Narasin indicated that the Board would evaluate the offer, although he noted that the offer did not appear to contemplate any payment to the holder's of fashionmall's preferred stock and that $3.50 is less than the book value per share of the company.
Calls to Michael Savage at Narax went directly to an answering machine that invited callers to leave a message.