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The bull's-eye on the back of Quaker Oats Co. may be more than any new chairman-CEO would want to wear.

William Smithburg's announcement last week that he plans to step aside as soon as the board finds a successor leaves a power vacuum that would-be suitors might try to fill.

This could be the time to strike, with Snapple gone, Gatorade's sales strong, other Quaker brands healthy and the company easily digestible. Though Quaker's brand portfolio is strong, a sale of the company-particularly to a larger concern well-versed in international distribution-would probably boost sales.


The list of potential suitors is diverse, depending on whether Quaker is sold as a single entity or in food and beverage pieces.

Marketers such as Grand Metropolitan or Nestle could easily integrate Quaker's food and beverage divisions into their own businesses. So, too, could Unilever, which is expected to have $5 billion to spend after shedding its specialty chemical division this year.

Gatorade alone is attractive to any beverage company. Coca-Cola Co. and PepsiCo both were said to be eager to grab Gatorate recently, but balked when that would have included Snapple.

Quaker's food division has many coveted high-profile brands. Its cereals-oatmeals, Cap'n Crunch, Life-could easily join those at General Mills or Kellogg Co. Kraft Foods could take Quaker's entire food division, encompassing grain and cereal lines.

Also, financial investors such as Kohlberg Kravis Roberts & Co. shouldn't be dismissed as potential acquirers, said First Boston analyst Michael Mauboussin.


"All the iterations make tons of sense on paper," he said. "The question is does anyone have any gumption to get it done?"

The specter of a sale or takeover obviously could hamper efforts to lure the best candidate to succeed Mr. Smithburg. The roster of possibles includes James M. Kilts, who resigned recently as exec VP of Philip Morris Cos.' worldwide Kraft divisions. Mr. Smithburg acknowledged Mr. Kilts' name has come up but added, "He's not part of this process."

Other potential candidates: Charles Gaillard, president of General Mills; James J. Postl, president of Nabisco Biscuit Co.; Douglas R. Conant, president of Nabisco's U.S. Foods Group; Robert F. Bernstock, president of Campbell Soup Co.'s U.S. grocery division; Dale F. Morrison, president of Campbell's international grocery and specialty products division; and former Pet Inc. CEO Miles Marsh, who now runs James River Corp.

Quaker directors whose names have emerged are Kenneth L. Chenault, president-chief operating officer, American Express Co.; Judy C. Lewent, senior VP-chief financial officer, Merck & Co.; and John H. Costello, senior exec VP, Sears, Roebuck & Co.

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