Dial is Officially for Sale

Dial S for sale. After a much-publicized, year-long strategic review, “the board concluded that in order to maximize shareholder value and ensure that our products remain competitive in the future, the company should be part of a larger enterprise,” said Dial’s chairman and chief executive, Herbert M. Baum.

He added that though “no serious discussions” have taken place to sell the whole company, there is interest in parts of Dial’s business. Mr. Baum noted, however, that selling Dial in pieces would result in a high tax bill, so shareholders would be better served by the sale of the company as a whole.

Dial has contemplated the possibility of a sale since last August, when Mr. Baum was hired to turn the company around and plot a new strategy after an ill-fated expansion into foreign markets and the creams and cosmetics business.

Among the suitors expected to compete for Dial are Kao Corp., which recently lost out to Procter & Gamble for the Clairol hair care business and Henkel, which has been building a bigger presence in the U.S. since its acquisition of Dep a couple of years ago.

Among U.S.-based companies, Sara Lee has been mentioned as a potential buyer of Dial. Analysts noted that other U.S. companies such as Procter & Gamble and Colgate-Palmolive would face stiff anti-trust scrutiny from U.S. regulators. But, given the tough economic climate in the U.S. and abroad the sale of Dial won’t be easy. “Unquestionably, it is not the best moment,” Dial spokesman Stephen D. Blum told the Wall Street Journal.

According to the Journal, analysts think Dial could command a price per share in the low-$20 range, compared with its current stock price of $17.44.