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ROSECLIFF PENSLER PARTNERS ISSUES STATEMENT ON KATY COMMON SHARES

 NEW YORK, Sept. 9 /PRNewswire/ -- Rosecliff Pensler Partners L.P. today announced that it has sent the following letter to the special committee of independent directors of the board of Katy Industries, Inc. (NYSE: KT). In its letter, Rosecliff Pensler states, among other things, that it is willing to discuss in the spirit of its proposal the acquisition from Katy at no less than $29 per share cash the approximately 582,000 common shares which Katy repurchased from non- Carroll family shareholders in June 1991 which had the effect of bringing the Carroll family's holdings from below 50 percent to 52 percent.
 The text of the letter from Peter T. Joseph, chairman and chief executive officer of Rosecliff, Inc. and Sanford N. Pensler, chairman and chief executive officer of Pensler Capital Corp., follows:
 We have received a letter dated Sept. 8 from your representative. Unfortunately, we believe this letter misses a central point. Specifically, the letter asks us what our intentions are in light of the Carroll family's initial reaction that it would not sell its shares to us, even though our proposal to pay at least $29 per share in cash for all the outstanding common stock of Katy Industries is a substantial premium over the family's proposed offer of $25.75 per share.
 The committee simply cannot hide behind self-serving statements publicly released in the name of the Carroll family to avoid its fiduciary obligations to all Katy shareholders. We want to consummate a friendly transaction in which we are willing to acquire all the common stock of the company for at least $29 per share in cash. We have made it clear that we have the financial capability to complete this transaction. In light of the board's prior acceptance of the Carroll family's $25.75 per share proposal, we believe our offer is far more attractive to Katy shareholders, particularly its public shareholders, and far better serves their interests.
 We believe the special committee of independent directors has a duty to fully consider and evaluate our offer on its merits, just as it did for the Carroll family's offer. We do not believe the committee should be biased by what the Carroll family may be saying at present just because they too have an offer on the table. We obviously are not in a position, nor would we think the special committee of independent directors is, to speculate on what the Carroll family ultimately will do if the special committee recommends our proposal to shareholders.
 Your representatives' letter of Sept. 8 also appears to heavily stress the influence of the Carroll family's present majority interest position. As you know, the Carroll family only holds a majority position because, a year prior to the initiation of the Carroll family's first proposal of $22 per share, Katy Industries used company funds to repurchase approximately 582,000 common shares from non-Carroll family shareholders, thereby increasing the Carroll family's interest from below 50 percent to 52 percent.
 In that regard, Rosecliff Pensler is willing to discuss in the spirit of its proposal the acquisition at no less than $29 per share in cash those repurchased public shares which are now held by Katy in its treasury. In so doing, the majority interest of Katy would, in effect, shift back to the public domain.
 In order to fulfill its fiduciary duties and thus serve the best interests of all Katy shareholders, it is incumbent upon the committee to request that its financial advisor, Goldman Sachs, update its fairness opinion in light of circumstances that have materially changed since the opinion was issued.
 We agree with you that time is of the essence and are pleased that you have instructed your representatives to meet with us to discuss our proposal.
 -0- 9/9/93
 /CONTACT: Lissa Perlman or Josh Pekarsky of Kekst and Company, 212-593-2655/
 (KT)


CO: Rosecliff Pensler Partners L.P.; Katy Industries ST: Illinois IN: MAC SU: TNM

SM-TW -- NY076 -- 0459 09/09/93 16:23 EDT
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Publication:PR Newswire
Date:Sep 9, 1993
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