Beatrice Pulls Down ‘For Sale’ Sign as Talks End

Food maker Beatrice Co., parent of Fullerton-based Hunt-Wesson, has taken itself off the auction block following the collapse of negotiations with an unidentified buyer.

Chicago-based Beatrice disclosed in a filing with the Securities and Exchange Commission that it has ended talks concerning the possible sale of its operating companies and the acquisition of Beatrice by a third party.

It had been widely speculated in the industry that Beatrice was negotiating a buyout with Netherlands-based Unilever NV, a food-industry giant.

Beatrice has three subsidiaries: Beatrice/Hunt-Wesson, the food processing division in Fullerton; Swift-Eckrich of Oakbrook, Ill., and Beatrice Cheese of New Berlin, Wis.

Hunt-Wesson, the largest of the divisions, has more than 10,000 employees, including 2,500 workers in four Orange County facilities. The division makes such brands as Wesson, Hunt’s, Orville Redenbacher, Peter Pan, Rosarita and Swiss Miss.

The company has sold all of its other assets since going private two years ago in a $6.2-billion leveraged buyout led by the investment group of Kohlberg Kravis Roberts & Co.

Chairman Donald P. Kelly announced last year that Beatrice would consider offers for its operations, and the entire company was put up for sale last fall.

But Kelly apparently was unable to negotiate a satisfactory deal. The company’s SEC filing said Beatrice has “no current plans to engage in further discussions” concerning the company’s acquisition or the sale of its major operating companies. “However, various other aspects may be disposed of from time to time,” the filing states.

The statement fueled speculation that Kelly might spin off either the Hunt-Wesson or Swift-Eckrich subsidiaries as a separate, publicly held company.

“It would give Kelly a public vehicle to do other deals with,” said Ron Morrow, managing director with Smith Barney, Harris Upham & Co. in New York.

Kelly created an acquisition vehicle called E-II Holdings from some Beatrice units after becoming chairman of the company. Earlier this year, E-II was purchased by American Brands for $2.7 million following E-II’s bid to acquire that company.

In Chicago, Beatrice spokesman Charles Long declined comment on the identity of Beatrice’s former suitor and dismissed the possibility of a spinoff as “speculation.”