Sunbeam Corp. Chairman Al Dunlap said yesterday that he had hired Morgan Stanley & Co. to advise the Delray Beach, Fla.-based company on buying other companies or selling itself, and speculation immediately focused on Towson-based Black & Decker Corp.
"The odds are weighted heavily in favor of Dunlap making an acquisition rather than selling the company," said Michael Chren, portfolio manager with Eagle Asset Management, which holds 414,575 Sunbeam shares. "Black & Decker is at the top of everybody's list."
Barbara Lucas, a Black & Decker spokeswoman, said there have been two rumors circulating that either one would buy the other. "First of all, we have no interest in acquiring Sunbeam," she said. "Second, there has been no contact between our company and theirs."
Black & Decker shares fell 56.25 cents, closing at $40.625, revealing little on a day when the Dow Jones industrial average fell 188 points. Sunbeam shares fell 12.5 cents to $48.25.
Dunlap, who earned the nickname "Chainsaw Al" by making deep cuts at other companies, cut half of Sunbeam's 12,000 jobs in November and unloaded 87 percent of a 5,000-item product lineup to focus on the Sunbeam and Oster lines.
Other potential targets of Sunbeam would likely include Rubbermaid Inc. of Wooster, Ohio, and Tupperware Corp. of Orlando, Fla. -- makers of storage containers whose stocks have fallen sharply from their highs this year, Chren said.
Maytag Corp., based in Newton, Iowa, has a strong brand name but its business of making big-ticket home appliances makes it a less likely target, he added.
A purchase of Culligan Water Technologies Inc. would give Sunbeam a larger share of the market for water purification products, but the Northbrook, Ill.-based company's market value about $1.1 billion makes it too small for Dunlap, who is looking for an acquisition that would give Sunbeam a "quantum leap," Chren said.
"We will pursue whatever course serves best to enhance shareholder value," Dunlap said.
Sunbeam has a market value of $4 billion; Black & Decker's is $3.8 billion. Schren said Sunbeam could slash costs at Black & Decker, while bolstering sales of the power tool and accessories maker.
But an analyst who insisted on anonymity quoted Dunlap as saying that he wouldn't be interested in Black & Decker.
