Parlux Fragrances Inc. (NDAQ:PARL) may soon find itself in trouble as 12.2% holder Glenn H. Nussdorf disclosed he filed a preliminary consent statement in a
13D/A filing with the SEC today. This move comes after several attempts by the activist investor to institute changes within the company. While no additional details were provided in this filing, Nussdorf did outline his plans in past filings with the SEC. According to his initial
13D filing with the SEC:
"As the beneficial owner of a substantial percentage of the outstanding
shares of Parlux, I believe that much can be done to increase
shareholder value and that it is time for immediate change at both the
Board and management levels. The decline in the Company's share price
from a high closing price of $18.96 earlier this year (after adjusting
for a 2-for-1 split in June 2006) to the current $6.26 level (a
decrease in shareholder value of 67%), the Company's recent disclosure
of decreased sales and earnings for the quarter ended September 30,
2006, and the allegations in the recently amended class action lawsuit
that the Company improperly recognized revenues on sales to related
parties, have led me to conclude that the Board of Directors is failing
to act in the best interests of the Company's shareholders and is not
exercising appropriate oversight of management. I am convinced that a
continuation of the status quo risks a further destruction of
shareholder value and, accordingly, I intend to protect the value of my
significant investment in the Company through a consent solicitation to
replace members of the Board of Directors.
As I have publicly
disclosed in my Schedule 13D filing, I am exploring the possibility of
making an acquisition proposal to acquire the Company in a business
combination transaction. While I have not made a decision at this time
whether to pursue such a proposal, I strongly urge the Board not to
take any action (such as the previously announced and subsequently
abandoned sale of the Perry Ellis brand) which would materially modify
or impact the Company's business, products or assets and could
adversely effect the Company's value. In addition, the consent
solicitation will present Parlux shareholders with a unique opportunity
to express their views on the future direction of the Company." (Read More)
Clearly, Nussdorf's most recent move indicates his continued conviction as to the company's intrinsic value. While he failed to give additional details as to his recent plans, he did indicate in the past that he would be seeking to replace the board (which is happening now) and would consider placing a bid to take over the company. Given the strong M&A market and the continued depressed PARL prices, this remains a possibility. This makes PARL a stock worth watching over the next few months.
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