Takeovers: A Pantry Raid At Revlon

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Revlon, the cosmetics giant, responded to a hostile takeover bid last week by putting on its war paint. The company's extra touch was a repellent that could be termed poison lipstick. Pantry Pride, a Fort Lauderdale-based supermarket chain, offered $1.8 billion for Revlon, or $47.50 per share. Declaring that the company was not for sale, Revlon's chairman, Michel Bergerac, and its board of directors adopted a variation on the so-called poison pill defense, in which the takeover target makes itself too financially painful to consume. In Revlon's case, the company would allow all shareholders except the hostile one to trade their holdings for debt certificates worth far more than the company's stock price. Many experts think Revlon will be able to fend off the invader.

The cosmetics empire, started by Charles Revson in 1932, has been showing signs of old age during the 1980s. Profits fell from $192 million in 1980 to $112 million last year. But in spite of pale cosmetic revenues, the company has become a takeover candidate because of its booming health-care business. More than half of Revlon's sales now come from such unglamorous products as Tums antacids and Orafix dental adhesive.