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Seeking Separate Buyers, Kodak Reopens Bidding for L&F; Products

From Bloomberg Business News

Eastman Kodak Co. is reopening bidding for its L&F; Products as it seeks separate buyers--and a higher price--for the unit’s two businesses.

The company said May 3 that it planned to sell L&F; and two other units, Sterling Winthrop and Clinical Diagnostics, to reduce debt and concentrate on its core imaging business.

L&F; now plans to sell its household products business and do-it-yourself business separately, L&F; President and Chief Executive Michael Gallagher told employees in a memo Wednesday.

The entire unit was expected to fetch $1.7 billion to $2 billion, analysts said. If L&F; is split, the household products business will probably sell for more than the do-it-yourself side, they said.

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“It makes a lot of sense,” said Nicholas Heymann of NatWest Securities. “Most likely any one single buyer would have subsequently turned around and sold the other part. Very few companies focus on both.”

The household group’s products include Lysol disinfectants, Resolve carpet cleaner, Olgivie hair care products, the Tussy makeup line and De-Con rat bait. It generated an estimated 60% of L&F;'s 1993 revenue of about $1.14 billion.

The do-it-yourself business is chemical- and paint-related, with brands including Thompson’s water sealant, Formby’s furniture refinisher, Minwax furniture refinisher and Red Devil enamel.

The internal memo said splitting the two businesses will link them closer to their industries. Howard Mead, an L&F; spokesman, said selling the company in two parts “is the best way to maximize shareholder value for Kodak.”

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Mead said Kodak executives decided Tuesday night to pursue two buyers in an effort to boost the sale price.

“The thinking is that people are generally willing to pay more for something that’s of more strategic interest to them,” he said.


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