December 29, 2000
Via Facsimile 212-891-6033
Fashionmall.com, Inc.
Ben Narasin, Chairman of the Board and
Board of Directors
575 Madison Avenue, 5th Floor
New York, NY 10022
Re: Proposed Business Combination with GenesisIntermedia.com, Inc. ("Genesis")
Dear Mr. Narasin:
The purpose of this letter is to propose a merger/business combination
transaction between Fashionmall.com, Inc. ("Fashion") and Genesis. The following
will specifically address a number of key terms of our offer and briefly
describe potential benefits of the proposed transaction.
We are prepared to acquire all of the outstanding common shares of Fashion
in a merger/business combination whereby shareholders of Fashion would receive
for each share of Fashion (a) $2 in cash and (b) .29 shares of common stock of
Genesis. At yesterday's closing price for Genesis common stock ($17.375), this
equates to a total value of approximately $7 per share of Fashion. This
represents a 170% premium to yesterday's closing price for Fashion common stock
and a 100% premium to the recently announced tender offer of $3.50 per share. We
currently own an approximately five percent stake in Fashion, and believe our
offer to be fair to Fashion shareholders.
We would like the Board of Directors of Fashion to immediately consider
this offer and enter into negotiations with Genesis with the intention of
executing a Definitive Agreement as rapidly as practicable.
We believe the strength of the proposed business combination resides on the
ongoing synergies to be enjoyed by the shareholders of the two companies. We
recognize that Fashion shareholders may desire some immediate liquidity for
their investment and are prepared to return cash in excess of the recent trading
value of the Fashion common stock. More importantly, however, we believe that
the focus of our business platform, deployment of the Centerlinq network in
retail malls around the country, and the Fashionmall on-line platform, can be
joined in a way as to create significant incremental value for shareholders. We
see many opportunities from merging the businesses together, including:
1. The Centerlinq network currently in place in shopping malls throughout the
country will provide significant exposure and drive additional traffic to
Fashion's websites.
2. Centerlinq video promotions in shopping malls and targeted sales promotions
to our extensive database of clients can drive additional traffic to
Fashion's websites as well as generate additional e-commerce opportunities.
3. The combined company will be better able to sell more advertising and
create more e-commerce opportunities for the Centerlinq network and
Fashion's websites by combining our West Coast sales force and strategic
marketing relationships with Fashion's East Coast sales force and
relationships.
4. Genesis and Fashion can combine their expertise to create "clicks and
mortar" strategies for mall developers and retailers.
5. The merger will generate significant benefits as a result of integrating
certain functions including administrative, management and software
development as well as integrating our network infrastructure.
We offer Fashion shareholders the opportunity for a significant equity
stake in a Company which together can become one of the largest networks serving
both the brick and mortar world and the internet. We believe that our proposal
presents an excellent opportunity for shareholders of Fashion to receive for
their shares a significant premium to current fair market value while still
participating in capital appreciation for their ownership stakes. We urge the
Board of Fashion to take immediate steps to meet with our representatives and
negotiate the specific terms of a business combination.
Sincerely,
_________________________
Ramy El-Batrawi
Chairman and Chief Executive Officer
