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Cosmetic Center and Revlon's Prestige Fragrance & Cosmetics Unit Sign Definitive Agreement to Merge

SAVAGE, Md., Nov. 27 /PRNewswire/ -- Mark S. Weinstein, Chairman of The Cosmetic Center, Inc. (Nasdaq: COSCA, COSCB), and Jerry W. Levin, Chairman and Chief Executive Officer of Revlon, Inc. (NYSE: REV), announced today that Cosmetic Center and Revlon have signed a definitive agreement for the merger of Prestige Fragrance & Cosmetics, Inc., Revlon's retail outlet subsidiary, into Cosmetic Center, a publicly held chain of retail specialty stores. The resulting entity would retain the Cosmetic Center name. As previously announced, the parties executed a non-binding letter of intent on October 1, 1996. The transaction is expected to close in early 1997, subject to certain conditions.
 Terms of the Transaction

Terms of the transaction are consistent with those announced on October 1. In the merger, Cosmetic Center's Class A and Class B shareholders could elect to receive for each share either one share of Cosmetic Center's newly issued Class C voting common stock or $7.63 in cash, and holders of employee stock options for Cosmetic Center's Class A and Class B common stock could elect to receive equivalent options for Class C voting common stock or (if their exercise prices are less than $7.63) cash in an amount equal to $7.63 less the exercise price for each option share. There would be a limit of 2,829,065 shares and options as to which cash elections would be accepted, and proration if shareholders and option holders elect to receive cash for more than 2,829,065 shares and options in the aggregrate. Revlon would receive newly issued Class C voting shares constituting 65% of the outstanding Class C shares on a fully diluted basis before taking into account shares and options for which holders elect to receive cash. As of September 30, 1996 there were approximately 4,296,134 shares of Cosmetic Center's Class A and Class B common stock outstanding and approximately 201,900 options with exercise prices of less than $7.63. Mr. Weinstein and certain of his family members, who together own approximately 51% of Cosmetic Center's Class B voting shares, and Revlon also signed a stockholder agreement pursuant to which Mr. Weinstein and his family members agreed to elect to receive cash for all of their shares and options, subject to proration. As a result, giving effect to the cash election, Revlon is expected to own at least 74% and up to 84% of Cosmetic Center's outstanding common shares. Mr. Weinstein and his family members have also agreed that if they do not vote their shares for the transaction or if they vote for an alternate transaction with another party they would pay Revlon a breakup fee of $1 million. They would also be responsible for Revlon's expenses under certain circumstances and a termination fee if an alternate transaction is consummated with another party. Cosmetic Center and Revlon each agreed that they would pay the other party's expenses under certain circumstances and a termination fee if an alternate transaction is consummated with another party.

The proposed transaction is subject to a number of significant conditions, including financing for Cosmetic Center and approval of the transaction by holders of a majority of Cosmetic Center's Class B voting shares, among other conditions. There can be no assurance that such conditions will be satisfied or that the merger will be completed.

Cosmetic Center operates 69 specialty retail stores, primarily in the middle Atlantic region and in Chicago, which offer a broad range of brand name prestige and mass merchandised cosmetics, fragrance and beauty products at value prices.

Prestige Fragrance & Cosmetics is a chain of 198 retail stores located in outlet malls in the U.S. that sell surplus and discontinued cosmetics and beauty merchandise from a wide variety of manufacturers.

SOURCE Cosmetic Center, Inc.
 -0- 11/27/96

/CONTACT: Bruce Strohl of The Cosmetic Center, Inc., 301-497-6700; Nancy Risdon of Revlon, Inc., 212-527-5791; or Investor Relations: Deena S. Fishman of Revlon, Inc., 212-527-5230/


CO: Revlon, Inc.; Cosmetic Center, Inc. ST: Maryland IN: HOU SU: TNM

MP -- NYW022 -- 4685 11/27/96 11:48 EST
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Publication:PR Newswire
Date:Nov 27, 1996
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