Fashionmall Gains on Buyout Bid (Nasdaq: FASH) was up 3/32 at 2 11/16 early Friday afterNarax, Inc., a Beverly Hills, California-based buyout firm, said it offeredto acquire the e-tailer for US$3.50 per share in cash.

Narax president Michael Savage said Fashionmall represents “an extraordinaryopportunity that could be developed with the help of its management and hasthe potential to expand into overseas markets.”

Added Savage: “I hope [Fashionmall’s] management will support the terms of the deal, asour offer is at a substantial premium to the current market price.”

Fashionmall’s management, however, does not appear to agree. BenjaminNarasin, chief executive officer of the New York-based company, said he was”skeptical that the offer was serious.”

Narasin said that Narax did not negotiate with Fashionmall before sending a faxoutlining its offer. Moreover, he said, a “preliminary investigation”performed by the company “failed to turn up any information about Narax.”

Narasin compared the offer to one the company received in October from Sitestar Corp. that never materialized.

Narasin said directors will evaluate the Narax offer, though he noted itdoes “not appear to contemplate any payment to the holders of Fashionmnall’spreferred stock.” Further, he said, the price is below the company’s bookvalue.

For its part, Narax said it invests in developing companies and Internetbusinesses and that it has financing to complete its offer.

Fashionmall, which last November traded above 52, operates fashion- andbeauty-related Web sites, including and Thecompany reported third-quarter revenue of $1.13 million, up from $889,000 inthe year-earlier quarter.

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