May 6, 2001

                    Media & Marketing

                    Analysts Predict Bristol-Myers May See Low Bids for Its Clairol Hair-Care Unit

                    A WSJ.COM News Roundup

                    NEW YORK -- With final bids for Bristol-Myers Squibb Co.'s
                    Clairol hair-care business due Friday, some on Wall Street
                    doubt the drug maker will receive anywhere near the high end
                    of the projected price tag of between $4 billion and $5
                    billion.

                                         Procter & Gamble Co. and Japan's Kao
                                         Corp. submitted bids in an auction for
                                         the unit, which was put up for sale last
                                         September, people familiar with the
                                         matter said.

                                         The $4 billion to $5 billion purchase price
                                         makes sense because consumer-products
                                         companies tend to sell at two to three
                                         times their sales, analysts said. Clairol
                                         generated sales of $1.89 billion in 2000.

                    When Wall Street analysts were batting around the $5 billion
                    figure about earlier this year, few thought the price tag was
                    excessive. Rather, it was considered appropriate for a
                    well-known, established name in hair care.

                    But given the limited number of bidders said to be interested
                    in acquiring Clairol and the number of bidders that have
                    dropped out since the auction began, Bristol-Myers could
                    wind up with some low-ball bids, said analyst Neil Sweig of
                    Ryan Beck.

                    "My guess is if one company offers $4.5 billion or above,
                    Bristol-Myers will jump," Mr. Sweig said. "But anything that
                    starts to flirt with $4 billion and below runs the risk of
                    problematic delays."

                    Germany's Beiersdorf AG elected against making a bid,
                    according to people familiar with the matter, because it
                    thought the price tag was too high. During recent months, a
                    host of consumer-products companies from Anglo-Dutch
                    company Unilever to Germany's Wella AG and Henkel AG
                    have dropped out of the bidding for one reason or another,
                    from being occupied with other deals, to a reluctance to pony
                    up for the business.

                    The conventional wisdom among analysts has been that
                    Cincinnati-based P&G would have the deepest pockets and
                    could easily walk away with Clairol.

                    But people familiar with the matter said P&G is wary of
                    paying too much for fear of angering investors who believe
                    the company should concentrate on fixing its business rather
                    than making a big acquisition. P&G is in the midst of a
                    multiyear restructuring program and plans to cut 16% of its
                    110,000 employees.

                    If the bids fail to meet the undisclosed reserve price,
                    Bristol-Myers could be pushed to lower the reserve.

                    Another possibility, though remote, would be to spin off the
                    business to shareholders, as the company did when its plan
                    last fall to sell its Zimmer medical-device business failed to
                    garner an acceptable price.

                    Most analysts, including Mr. Sweig, don't think Bristol-Myers
                    will spin off Clairol, however, and will instead negotiate an
                    acceptable sale rice.

                    "It was never in the plan to spin off" Clairol," said CIBC
                    World Markets analyst Mara Goldstein.

                    Bristol-Myers spokesman Charles Borgognoni wouldn't
                    comment on the auction, saying, "we view the specifics with
                    regard to any negotiation about the divestiture of Clairol as
                    proprietary and we won't discuss it."

                    A Procter & Gamble spokesman declined to comment. A Kao
                    spokesman couldn't be reached for comment.