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Sally Beauty Supply – Regis deal is off

Beauty Supply

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Sally Beauty Supply gives back the ring

I have an emotional investment in this story. Sally Beauty Supply is one of my favorites for buying hair care products and Regis is a hometown corporation for us here in the Twin Cities. But alas, it looks like there will be no honeymoon for SallyBeauty Supply
Deal is Off
. Regis has been rebuffed.

It appears Regis has fallen on hard times and may have some holes in the soles of its shoes that Sally never noticed until the wedding day approached.

Too bad, Regis is a good company, well managed and by and large attracts some very good hairdressers. As a matter of fact, I have personally done some work for them in the past and can attest to its fine management, but here’s the story from the horse’s mouth Courtesy of the St. Paul Pioneer Press:

Regis deal for Sally Beauty Supply is dead

Alberto-Culver cites financials

Edina based Regis Corp. on Wednesday terminated its $2.78 billion purchase of Alberto-Culver Co.’s 3,200 Sally Beauty supply stores after Alberto-Culver’s board withdrew its support for the deal, citing concerns about Regis’ financial outlook.

Illinois-based Alberto-Culver said its board of directors unanimously withdrew support for the deal citing Regis’ revised financial forecasts as well as differences over corporate governance issues.

In a statement, Alberto-Culver noted that since the two companies announced the tentative deal in January, Regis has had two earnings shortfall announcements, raising uncertainty about its fiscal 2007 outlook.

Alberto-Culver said the two companies had “certain differences over operating and governance approaches,” adding it failed to get Regis to revise the parties’ proposed stock exchange ratio to make up for the “substantial reduction in transaction value to Alberto-Culver’s shareholders since Regis’ March 21 earnings shortfall announcement.”

Regis, which operates salons such as Regis Hairdressers and Supercuts, said Alberto-Culver is obligated to pay an unspecified termination fee.

In a telephone interview, Regis Chief Executive Officer Paul Finkelstein blamed the merger break-up on differences over stock valuation. “They wanted to re-price, and our shareholders were equally vociferous in not wanting to re-price,” Finkelstein said. Although acknowledging Regis’ recent performance has been lackluster, Finkelstein contended, “You never price a business based on one year that has been flat.”

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Read the entire Sally Beauty Supply – Regis merger article

  





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