Parlux Fragrances up 74% After Friday's Proposed Merger

Shares of Parlux Fragrances PARL are trading up over 74% on Tuesday after Friday's proposed merger with Perfumania Holdings PERF. Under the terms of the agreement, Perfumania would acquire all of the outstanding shares of Parlux in a transaction valued at approximately $170 million, based on Perfumania's closing stock price of $19.55 per share on December 22, 2011. Based on the $19.55 per share price of Perfumania and depending on upcoming stockholder elections, the merger agreement values a share of Parlux stock at between $7.91 and $8.55, assuming no adjustments under the merger agreement other than such elections. Parlux's closing market price on December 22, 2011 was $3.40 per share, and there were 20,769,362 shares of Parlux common stock outstanding on that date. Currently, shares of Parlux Fragrances are trading up over 74% at $6.05, below the proposed merger-agreement value of $7.91-$8.55.