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into the joint venture was to acquire JPMS; Gillette had no
interest in a minority shareholder position.
Gillette neither exercised nor waived its right to exercise
its right of first refusal contained in the joint venture
agreement. During the pendency of the joint venture, Gillette
received no notification concerning any offers by third parties to
purchase the stock or assets of JPMS.
Only Gillette's board of directors could approve an
acquisition the size of JPMS. No formal proposal was ever made to
Gillette's board of directors to approve the acquisition of JPMS.6
The permanent wave product marketed through the joint venture
agreement was not well received in the salon market. The joint
venture lost $1 million in the first 2 years and was unsuccessful.
Accordingly, the joint venture agreement was terminated in December
1989.
6 According to Mr. DeJoria, a Gillette representative
orally proposed the acquisition of JPMS for $150 million and a 1-
percent royalty payment to each of Messrs. Mitchell and DeJoria.
Mr. DeJoria responded that he thought JPMS was worth more.
However, Roland L. Loper, Gillette's vice president and
controller of the personal care division from 1987 through 1988,
and vice president for finance and strategic planning of the
personal care group in 1989, insisted that no such offer was
made.
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