Pursuant to Rule 425 under the Securities Act of 1933and deemed to be filed pursuant to Rule 14a-12 of
the Securities Exchange Act of 1934
Subject Company: Movie Star, Inc.Commission File No.: 333-143619
1115 BROADWAY
Movie Star, Inc. Announces
Filing of Preliminary Proxy Statement
for Proposed Merger with Frederick ’s of Hollywood
Filing of Registration
Statement for $20 Million Rights Offering
New York, New York (June 11,
2007)—Movie Star, Inc. (AMEX: MSI)
(“Movie Star”) announced today that it has filed a
preliminary proxy statement with the Securities and Exchange Commission (“SEC”)
for a special meeting of shareholders to be held to consider, among other
things, a proposal to approve the issuance of shares of Movie Star common stock
in connection with the transactions contemplated by the previously announced
definitive merger agreement that provides for the merger of a wholly-owned
subsidiary of Movie Star into FOH
Holdings, Inc. (“FOH Holdings”), the parent company of Frederick’s of
Hollywood, Inc. As a result of the
merger, FOH Holdings will become a wholly-owned subsidiary of Movie
Star. Pursuant to the merger agreement, FOH Holdings’ stockholders will receive
approximately 23.7 million shares of newly issued Movie Star common stock in
the merger, or 60% of the combined company without giving effect to the rights
offering described below.
Once the preliminary proxy statement is
cleared by the SEC, Movie Star will mail a definitive proxy statement to its shareholders
of record as of a future date to be determined. The date of the special meeting of shareholders
and the record date for the meeting will be specified in the definitive proxy
statement. For shareholders’ general
information, the preliminary proxy statement is available on the SEC’s website
at www.sec.gov or Movie Star’s website at www.moviestarinc.com.
Movie Star also announced today that it has
filed a registration statement with the SEC covering shares of Movie Star
common stock to be issued upon the exercise of non-transferable subscription rights. Upon the effectiveness of the registration
statement, Movie Star will distribute to its shareholders as of the record
date, which has not yet been determined, one subscription right for each share
of Movie Star common stock held. Movie
Star will raise an aggregate of $20 million in gross proceeds through the
rights offering and a commitment by the standby purchasers discussed below. The net proceeds from this offering will be
primarily used to launch
Each
subscription right will entitle a shareholder to purchase a predetermined
number of shares of Movie Star common stock, rounded down in the aggregate to
the nearest whole number, at a subscription price to be determined. If the
subscription rights are not exercised in full by Movie Star shareholders, Fursa
Alternative Strategies, LLC (“Fursa”) and certain funds and accounts affiliated
with, managed by, or over which Fursa or any of its affiliates exercises
investment authority, including, without limitation, with respect to voting and
dispositive rights, Tokarz Investments, LLC and TTG Apparel, LLC, have agreed
to act as standby purchasers and purchase directly from Movie Star, at the same
subscription price, all shares of Movie Star common stock not subscribed for in
the rights offering.
Neither Movie Star, its
board of directors, nor any committee of the board of directors is making any recommendation to shareholders as to
whether to exercise their subscription rights to purchase shares of Movie Star
common stock. A registration statement relating
to these securities has been filed with the SEC, but has not yet become
effective. The subscription rights will
not be distributed and shares of Movie Star common stock may not be sold and
offers may not be accepted prior to the time the registration statement becomes
effective. The rights offering will only
be made by means of the prospectus, which is not yet available. When available, a copy of the prospectus may
be obtained from Movie Star, Inc., 1115 Broadway,
This press release shall not constitute an
offer to sell or the solicitation of an offer to buy these securities, and
there shall not be any sale of these securities in any state in which such
offer, solicitation, or sale would be unlawful prior to registration or
qualification under securities laws of any such state.
The closing of the transactions contemplated
by the merger agreement, including the rights offering, are expected to occur
in the fourth calendar quarter of 2007, subject to the approval of the matters
specified in the preliminary proxy statement by Movie Star’s shareholders and
other customary closing conditions. The preliminary proxy statement contains
important information regarding these conditions and the transactions in
general.
MOVIE STAR, INC. designs, manufactures (through independent
contractors), imports, markets and distributes women’s intimate apparel,
including sleepwear, robes, leisurewear and daywear, to mass merchandisers,
specialty and department stores, discount retailers, national and regional
chains and direct mail catalog marketers throughout the United States. Current collections include the Cinema Etoile premium line of intimate
apparel and the Movie Star line of
apparel sold as private label programs.
Important Additional Information Will
be Filed with the SEC
In connection with the
transactions contemplated by the merger agreement, Movie Star will file a
definitive proxy statement and a final prospectus with the SEC. BEFORE MAKING ANY INVESTMENT DECISION TO
PARTICIPATE IN THE RIGHTS OFFERING, MOVIE STAR SHAREHOLDERS ARE URGED TO READ
THE FINAL PROSPECTUS CAREFULLY IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED RIGHTS
OFFERING. BEFORE MAKING ANY VOTING
DECISION, MOVIE STAR SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT CAREFULLY IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Movie Star shareholders and other interested
parties will be able to obtain, without charge, a copy of the definitive proxy
statement and final prospectus (when available) and other relevant documents
filed with the SEC, from the SEC’s website at http://www.sec.gov. Movie Star shareholders and other interested
parties will also be able to obtain, without charge, a copy of the definitive
proxy statement, final prospectus and other relevant documents (when available)
by directing a request by mail or telephone to Movie Star, Inc., 1115 Broadway,
New York, NY 10010, telephone: (212) 798-4700.
Participants in the Solicitation
Movie Star and its
directors and officers may be deemed to be participants in the solicitation of
proxies from Movie Star shareholders with respect to the transactions
contemplated by the merger agreement.
Information about Movie Star’s directors and executive officers and
their ownership of Movie Star common stock is set forth in the preliminary proxy
statement referenced above and will be set forth in the definitive proxy
statement. Shareholders and investors
may obtain additional information regarding the interests of Movie Star and its
directors and executive officers in the transactions contemplated by the merger
agreement, which may be different than those of Movie Star shareholders
generally, by reading the proxy statement and other relevant documents
regarding the transactions contemplated by the merger agreement that have been
or will be filed with the SEC.
Forward Looking Statement
Certain of the matters
set forth in this press release are forward-looking and involve a number of
risks and uncertainties. Among the
factors that could cause actual results to differ materially are the following:
business conditions and growth in the industry; general economic conditions;
addition or loss of significant customers; the loss of key personnel; product
development; competition; risks of doing business abroad; foreign government
regulations; fluctuations in foreign rates; rising costs for raw materials and
the unavailability of sources of supply; the timing of orders booked; failure
to realize the merger’s anticipated synergies; approval of the transactions by
Movie Star’s shareholders and satisfaction of various other conditions to the
closing of the merger contemplated by the merger agreement; and the other risks
that are described from time to time in Movie Star’s SEC reports.
CONTACT: INVESTOR RELATIONS:
Movie Star, Inc.
-or- SM Berger & Company, Inc.
Thomas Rende, CFO Stanley Berger
(212) 798-4700 (216) 464-6400