A takeover to secure the rights to sell Paris Hilton’s scent in a bottle is giving traders a chance to triple their money.
Parlux Fragrances Inc., which makes perfumes named after celebrities, including Hilton and pop-music singer Rihanna, ended Wednesday 76 cents below its offer from Perfumania Holdings Inc. While Perfumania has slumped since agreeing to pay more than double Parlux’s market value in the costliest cosmetics deal relative to earnings, traders can reap an annualized return of as much as 218 percent buying Parlux shares if the company produces enough cash as a condition of the deal when it reports earnings next month, according to data compiled by Bloomberg. The acquisition would give Perfumania, which operates more than 300 perfume shops across the U.S., control of its largest supplier. Bloomberg News
