Beatrice Co. Chairman Donald P. Kelly, known for his interest and expertise in deal making, will resign from the top post of the Chicago-based consumer products firm.
No successor was immediately named for the top job, parent of the Fullerton-based Beatrice/Hunt-Wesson.
The resignation, effective Oct. 1, is part of an effort to organize a management team that will concentrate on developing operations--not divestment strategies--for company units, the company said. The shift began last month in the wake of Kelly's failed attempt to sell Beatrice.
Kelly, 66, initiated the effort last fall by announcing that offers for the entire company would be considered. Beatrice last month disclosed that it had ended talks concerning the possible sale of its operating companies after Kelly and an unidentified concern failed to negotiate a satisfactory deal.
The major subsidiaries--Swift-Eckrich of Oakbrook, Ill., Beatrice Cheese of New Berlin, Wis. and Hunt-Wesson--were taken off the block when Beatrice, in a filing with the Securities and Exchange Commission, said there were "no current plans to engage in further discussions" on the sale of entire units. Hunt-Wesson products are marketed under the Hunt and Wesson names, and the line also includes Orville Redenbacher popcorn and Peter Pan peanut butter. Swift-Eckrich produces meat products.
A possible dispute between the company's board and chairman over the prospects of selling the entire company or an entire subsidiary at a desireable price may have been a factor in Kelly's departure, according to some industry analysts.
"The conventional wisdom is that it would be difficult to find a package deal for Beatrice in view of the disparity of the product line," said John Bierbusse, an analyst with A. G. Edwards. Bierbusse said Kelly may have wanted to sell larger segments of the company than other board members.
The company would not comment on board proceedings.
Bierbusse said Kelly may be planning to launch a new company that would attempt to acquire and sell other firms.
Two senior vice presidents--J. S. Corcoran, 45, senior vice president-finance, and William E. Reidy, 57, senior vice president-strategic planning--also have decided to leave the company to pursue other interests, the company said.
A company statement said Kelly would remain on the board, adding that the company's president and chief executive, Frederick B. Rentschler, 49, would retain his position and duties. Kelly's resignation, said the statement, is "in keeping with Beatrice's present focus as an operating company and its reduced emphasis on restructuring and reorganizational activities."
"The bottom line," said Lizabeth Sode, a company spokeswoman, "is that the company has been involved in restructuring and divestment and that phase has ended. Don's forte is deal making and that is not as appropriate as we close that chapter and move into a new phase."
The deal making began after Kelly joined with the New York investment firm of Kohlberg Kravis Roberts & Co. in an $8.4-billion leveraged buyout of Beatrice in 1986. The acquisition was a turnabout for Kelly, who was head of Esmark, the owner of the maker of Hunt-Wesson products until it was acquired by Beatrice in 1984. Kohlberg Kravis owns about 87% of Beatrice and the company's managers and directors own the remaining 13% of the equity.
Since the buyout, Beatrice has sold more than $7 billion in assets, including units involving Tropicana juice and Playtex products. The company also sold Beatrice International, a food and beverage company composed of foreign operations, Avis Rent-a-Car and a Los Angeles-based Coca-Cola bottling operation.
Kelly also spun off E-II Holdings Inc., which encompassed specialty food operations and non-food enterprises such as Samsonite luggage and Culligan water treatment systems.