
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, June 4, 1993                   TAG: 9306040172
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
SOURCE: By Knight-Ridder/Tribune
DATELINE: CHARLOTTE, N.C.                                LENGTH: Medium

CARPET DIVISION SOLD OFF

A week after an unwelcome suitor proposed a takeover, Fieldcrest Cannon Inc. announced a $140 million deal to sell its carpet division.

The Eden, N.C.-based company said Thursday it has agreed to sell the division, including its premier Karastan and Bigelow brand names, to Mohawk Industries Inc. in Atlanta. The division's $235.5 million in sales accounted for about 20 percent of the company's 1992 sales.

"It's a strategic decision, allowing to focus on our core businesses, which are bed and bath products," said Jack Riley, vice president of the carpet and rug division.

John Swift, Mohawk's vice president of finance, said it was too soon to tell whether any of the 2,500 employees in the division would lose their jobs.

The timing of the sale fueled speculation that Fieldcrest Cannon is trying to fend off a $330 million acquisition bid May 27 by Springs Industries Inc. of Fort Mill, S.C. Springs also made a $122 million offer for Amoskeag, a Boston management company that controls 80 percent of Fieldcrest Cannon stock's voting power.

Fieldcrest Chairman James Fitzgibbons said the company is not for sale, but Amoskeag's majority owner, the Dumaines Trust, is considering selling its stake in Fieldcrest Cannon.

"It appears to us what they [Fieldcrest executives] are trying to do is raise cash to buy the stock back from Amoskeag or to do a leveraged buyout," said Andrew Poulterer, an analyst with Anderson & Studwick in Richmond. "Fieldcrest is on the defensive now."

The deal, which is subject to approval by federal regulators, would give Mohawk about 10 percent of the $8.7 billion U.S. carpet market and make it the country's second-largest carpet maker, said Kay Norwood, an analyst with Interstate/Johnson Lane in Charlotte.

The stock market reacted favorably, boosting Fieldcrest Cannon $1.125 a share to $28.625, above the $27.50 a share Springs offered.

In other New York Stock Exchange trading, Springs closed at $44.875, down 12.5 cents. In Nasdaq trading, Mohawk soared $6.75 a share to close at $34.25 and Amoskeag jumped $2 a share to close at $37.75, well above the $35 a share Springs offered.

by CNB