What happened
Is Revlon (REV) in play?
Many investors are sure convinced it is, as evidenced by the stock's outsize 91% price gain on Friday. It was little wonder, though: A credible media outlet said a global conglomerate is interested in acquiring the storied cosmetics company.
So what
On Friday, ET Now, a financial news show in India, broke the story that, according to unidentified sources, the country's sprawling conglomerate Reliance Industries is interested in bidding for Revlon.
ET Now did not speculate as to how much Reliance is willing to pay for the storied cosmetics specialist. The Indian company has not yet officially commented on the report, nor has Revlon.
If the report is accurate, it shows that Reliance is being very opportunistic with the American company; the previous day, Revlon announced that it had filed for Chapter 11 bankruptcy protection. The company said in a press release that this "will allow Revlon to strategically reorganize its legacy capital structure and improve its long-term outlook."
Part of this is $575 million in financing from Revlon's existing lenders, which is subject to court approval. The company said it would use these monies to provide liquidity for its operations, and to retire foreign debt.
Now what
One major reason investors are finding the news of Reliance's interest in Revlon believable is because the Indian company is also in the hunt for U.K. pharmacy and cosmetics retail chain Boots, currently in the portfolio of Walgreens Boots Alliance. And Reliance already has a clutch of retail assets.
Earlier this month, Reliance and U.S. private equity fund Apollo Global Management filed an offer of more than 5 billion British pounds ($6.1 billion) for Boots.
