From: Paul Bartomioli, [EMAIL PROTECTED] http://public.wsj.com/news/personalEmail/SB964168562931362870-SB964396766402314316.html Tomkins to Sell Smith & Wesson In Plan to Shed Its Noncore Units By WADE LAMBERT and RICHARD B. SCHMITT Staff Reporters of THE WALL STREET JOURNAL Smith & Wesson Corp., the largest U.S. handgun maker, is being put up for sale by its British parent. London-based Tomkins PLC, long derided as an unfocused "guns-to-buns" conglomerate, is in the process of selling off noncore operations to focus on automobile parts and home-building materials. That streamlining will include a sale of Smith & Wesson, Tomkins Chief Executive Gregory Hutchings said Friday. Though Smith & Wesson is Tomkins's best-known brand in the U.S., it accounts for only about 1% of the company's total sales. Mr. Hutchings said Tomkins hasn't yet held talks with potential buyers for the gun unit. As expected, Tomkins also announced on Friday an agreement to sell its food business, Ranks Hovis McDougall, to private equity firm Doughty Hanson & Co., of London, for 1.14 billion pounds ($1.72 billion, 1.84 billion euros). The food business, which was put on the block a year ago, accounted for nearly a third of Tomkins's total sales of 5.61 billion pounds ($8.48 billion, 9.09 billion euros) for the fiscal year ended April 30. The prospect that Tomkins might unload S&W raised concerns among regulators that the company's recent role as an industry peacemaker in the gun debate might be jeopardized. In March, the company reached a landmark agreement with the Clinton administration and a number of state and local governments to adopt restrictions on the way it makes and markets handguns. In exchange, many of the local governments that have sued the gun industry as a whole agreed to drop the company from those court actions. The Clinton administration also agreed not to name S&W in any suit it may file against the gun industry. The terms of that agreement would "attach ... just like any obligation or liability," said Richard Blumenthal, Connecticut's attorney general, who helped strike the accord. Mr. Blumenthal added, however, that a sale could nonetheless create major uncertainties, and that a new owner might still attempt to undermine the spirit, if not the letter, of the pact. "Whether [a new owner] would continue to be as steadfast and courageous as the present management has been, whether it would seek to reinterpret the agreement, whether it would redesign the business plans to produce different kinds of firearms are all among the big questions," he said. A sale would also likely touch off a battle over who would cover S&W's potential liability in any remaining government suits against the company or in private suits on behalf of gun victims. Typically, purchasers of companies involved in litigation don't assume any of the liabilities of the seller, absent specific agreement. On the other hand, courts have carved out exceptions, such as cases in which a former parent has tried to defraud injury victims by leaving itself with little money to satisfy claims. "If the traditional rules are followed, in the absence of fraud or agreement, the successor is not liable," said Victor Schwartz, a Washington product-liability specialist and defense lawyer. But, he says, he expects that plaintiffs lawyers will "do everything possible" to try to follow the money. It is hard to predict who might emerge as a buyer for S&W. While its March peace agreement may limit its litigation exposure in a way that an acquirer may find attractive, the deal also made S&W an industry pariah. That could lead other gun makers to shy away from any transaction. Likely buyers may also want to see how developments unfold on the litigation front, to get a better sense of potential liability. They may also delay any move until after the presidential election, in the hopes that a Bush administration would be less hostile to the industry. Mr. Hutchings's statement that S&W will be sold marks a shift. Tomkins had explored selling the company within the past several years, according to gun-industry executives familiar with the situation, but last year said it had put that effort on hold. A spokesman for S&W, based in Springfield, Mass., said the unit wasn't aware of any discussions with suitors or specific plans for the sale. "We anticipate at some point we will be sold so they can focus on their core companies," the spokesman said. -- At the rate they're going a whip round at the club should be able to buy them out! Steve. Cybershooters website: http://www.cybershooters.org List admin: [EMAIL PROTECTED] ___________________________________________________________ T O P I C A The Email You Want. http://www.topica.com/t/16 Newsletters, Tips and Discussions on Your Favorite Topics
