For Regis Corp., Sept. 30 couldn't come fast enough. That's the drop-dead deadline for Regis to sell its minority stake in Provalliance, a Paris-based chain of European hair salons, to the family of stylist Franck Provost for 80 million Euros.
When Regis and the Provost family first announced the agreement in April, 80 million euros was worth nearly $106 million. Today, 80 million euros is worth about $100 million.
Europe today is not the ideal place to strike deals. Weighed down by economic recessions, huge debts and soaring deficits, countries like Portugal, Ireland and Greece have already received multi-billion dollar bailout packages. Italy and Spain, two of the largest economies in the euro zone, seem certain to follow.
As the crisis mounts, the euro continues to lose valuation against the dollar. By the time Regis and the Provost family close the deal, 80 million euros could be worth a lot less than $100 million.
Regis needs every penny. The company, pressured by activist investor Starboard Value, has been trying to shed its "non-core assets" and focus on its struggling core North American salon business. Selling assets will also allow Regis to return cash to impatient investors, annoyed by the company's sluggish stock price over the past two years.
It seems like Regis already knew this deal wasn't going to be easy. In the April news release, Regis pointedly noted the transaction is "subject to the Provost family securing financing for the purchase price."
Given Europe's woes, that's far from certain.