Considering the tumultuous events surrounding W.R. Grace & Co. in the past few months, no one was certain what to expect from the company's annual shareholders meeting last week.
Albert Costello, Grace's newly appointed president and chief executive officer, led the meeting as the Boca Raton, Fla.-based company began the painstaking task of refocusing its business strategy and assembling its senior management team.
Costello was named Grace's new CEO earlier this month after a stormy period in which the former CEO was accused of sexual harassment and the company's longtime chairman resigned.
Costello told shareholders he is resigned to selling the company's profitable dialysis and home infusion subsidiary, National Medical Care, over the next 60 days.
However, to whom and for how much remain in question.
So far, the leading bidder for NMC is its CEO and co-founder, Constantine Hampers, who also is a Grace executive vice president (See related story, this page).
Hampers made a $3.5 billion offer for the company earlier this month-$3 billion of which would be in cash (May 8, p. 2).
Hampers had been considered a leading candidate for Grace's CEO position following the abrupt March resignation of the company's former head, J.P. Bolduc.
Grace's board of directors instead hired Costello, former CEO of American Cyanamid Co., earlier this month.
Costello initially said he would consider Hampers' bid "in due course." However, when shareholders questioned him about Hampers' bid last week, Costello declined to comment.
However, he did say the company would seek competing bids for NMC, which some analysts estimate to be worth in excess of $4 billion.
Published reports last week listed hospital supply company Baxter International, which competes directly with NMC for blood therapy devices, as a possible outside bidder. A spokeswoman for the Deerfield, Ill.-based company declined to comment on the reports.
NMC is the nation's largest manufacturer and operator of outpatient kidney dialysis equipment and services. The company operates nearly 600 freestanding kidney dialysis centers worldwide.
NMC is the gem of Grace's healthcare division, which generated $1.9 Specialty care
billion in 1994 revenues, up 24% from 1993. While NMC has provided Grace with steady profitability over the past decade, it also has had its share of problems.
Grace's recent filings with the Securities and Exchange Commission disclosed that federal grand juries in New Jersey and Virginia are investigating Waltham, Mass.-based NMC. The New Jersey panel is trying to determine whether the dialysis provider sold defective products and properly handled customer complaints. Separately, a grand jury in Alexandria, Va., is investigating contracts between NMC's dialysis service business and third parties providing medical directorships and other services, Grace said.
The Food and Drug Administration cited Grace for the second time in two years for violating regulations regarding the importation of dialysis equipment manufactured at Grace's plant in Dublin, Ireland (April 17, p. 9).
The unraveling of Grace began in March after the company revealed that then-CEO Bolduc's resignation was related to allegations that he sexually harassed several female employees. Bolduc vehemently denied those charges.
Shortly after Bolduc's departure, J. Peter Grace, the company's longtime chairman, resigned amid a shareholder dispute. The 81-year-old Grace died one month later of cancer.