Borden Chemicals and Plastics LP, North America's fourth-largest PVC maker, has hired two investment banking firms to explore alternatives for the business, including its potential sale.
Borden, based in Columbus, Ohio, will work with Salomon Smith Barney and Evercore Partners in an attempt to maximize shareholder value, Borden officials said.
``While we have been exploring alternatives ourselves, we believe that the experience and resources brought to the table by Evercore Partners and Salomon Smith Barney will strengthen the process,'' said Joseph Saggese, president of BCP Management Inc.
BCP Management, a unit of New York holding company Kohlberg Kravis Roberts & Co., acts as Borden's general partner and owns 2 percent of the firm.
The firms ``are looking at a full range of options,'' including the sales of assets or businesses, mergers, joint ventures or further integration into raw materials or finished goods, Borden spokesman Peter Loscocco said in a Jan. 6 telephone interview.
Three days before Borden's announcement Dec. 31, an aggressive Minneapolis-based group led by investors Marc Kozberg and Bruce Hendry increased its share of Borden stock to 9.2 percent.
Kozberg is president of Dougherty Summit Advisors, a Minneapolis firm with a reputation for buying and transforming struggling companies. Hendry is an investment executive with Dougherty Summit.
The new purchase was led by the addition of Nasser Kazeminy, a Bloomington, Minn., businessman who bought about 2 percent of Borden stock. The original investment group, including Minneapolis billionaire Curt Carlson, had bought almost 7 percent of Borden stock since late October.
In a Jan. 6 telephone interview, Kozberg said his group believes Borden stock is seriously undervalued. He said his group will seek to hire its own investment banker.
``Any time a company looks at ways of increasing shareholder value, that's a positive thing,'' he said. ``As long as they're a publicly traded company, that's what they should be doing anyway.''
Borden's Loscocco said hiring the investment advisors was not connected to the actions of the Minneapolis group. ``They're unrelated events linked only because they happened in the same month,'' he said. ``We were already moving in that direction.''
Loscocco said Borden does not object to the Minneapolis group hiring its own investment banker.
``Any investor has the right to bring in any outside view they need to make decisions,'' he said. ``If [the Minneapolis group] makes that decision, more power to 'em. We have common goals of improving unit value.''
Borden officials said the firm has seen financial losses for five consecutive quarters because of a severe, industrywide, cyclical downturn in its businesses.
PVC accounts for about two-thirds of Borden's sales. The firm was damaged seriously as PVC prices plummeted during 1998 because of overcapacity and the collapse of the Asian export market.