Lawyer: Sale of Parlux Fragrances to Perfumania should be blocked

Parlux Fragrances Inc’s $170 million sale to Perfumania Holdings Inc. (PERF) should be blocked because directors of the maker of Paris Hilton perfume didn’t seek a higher bid, a lawyer for Parlux shareholders said.

Parlux’s board also failed to disclose that Perfumania officials threatened to begin a proxy fight unless the offer was accepted, attorney Donald J. Enright told Delaware Chancery Court Judge Sam Glasscock.

The directors “caved into the pressure” after being threatened by Perfumania, Enright said at a hearing today in Georgetown, Delaware. A special committee that was appointed following the threat only evaluated the proposal and didn’t solicit offers from other buyers and failed to lock in an all- cash option that had been part of an earlier offer.

Glasscock said that he would “address this promptly” and told lawyers that he would either issue a written opinion next week or make a ruling from the bench.

Fort Lauderdale, Florida-based Parlux announced Dec. 23 it would sell the company to Perfumania, which operates a chain of about 360 perfume shops, in a deal then valued at $170 million, according to a company statement.

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