By Craig Zammit
ATLANTA, USA: Rayovac is once again on the verge of becoming an independent company, with news that Spectrum Brands is looking to sell assets beyond its lawncare and garden business, and the rumoured $US820 million deal said to be nearing completion.
Prudential Equity Group analyst, Constance Maneaty, recently told the Associated Press that the lawn and garden sale won’t present the company’s balance sheet with the required increase, stating that Spectrum may look to sell off a second asset – believed to be its battery business.
Maneaty stated that in 2006 Spectrum could have sold off its Varta European battery and Remington business for $US900 million, its Varta business and insect and household controls unit for $US510 million or its Varta and lawn and garden businesses for $US1 billion.
Deutsche Bank analyst, Bill Schmitz Junior said he believes the market’s reaction to Spectrum’s first quarter results was overdone, and that selling off assets could potentially put Spectrum back on top.
“The outlook for 2007 is bleak and it will clearly be a rebuilding year, we believe there is still a solid opportunity to downsize the business (and) drive ongoing restructuring savings, as assets are shuttered,” Schmitz Junior said in a note to investors.
Spectrum last month announced a restructuring plan which will involve shedding 500 of the company’s near-10,000 employees, as well as dividing the company’s units into types based on product rather than geography.