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KATY INDUSTRIES ANNOUNCES REPORT OF SPECIAL COMMITTEE

 ELGIN, Ill., Dec. 18 /PRNewswire/ -- Katy Industries, Inc. (NYSE: KT) announced today that a special committee of its board of directors did not recommend to the full board approval of the previously announced proposal by members of the Carroll family (holders of more than 51 percent of Katy's outstanding common stock) under which the family would acquire all of the common stock of Katy not already owned by the family at a price of $22 per share in cash through a merger of Katy with a family owned company.
 The company also stated that the special committee reported to the board its recommendation that the board consider an increase in the number of shares previously authorized for repurchase, other possible strategic or restructuring alternatives, and to begin immediately a search for a new senior management team, taking into account William H. Murphy's planned retirement as Katy's president at year end. Mr. Murphy will continue to serve as a director and a member of the executive committee of Katy. The board of directors has taken the committee's report under advisement, and the committee has disbanded.
 Katy also said that the members of the Carroll family had withdrawn their proposal in view of their inability to reach an agreement on the price to be paid in the transaction after lengthy negotiations with the special committee.
 Katy further stated that members of the family have advised it that the family presently intends to continue to review its options with respect to its interest in Katy and may consider, among other things, making another proposal to acquire the equity interest in Katy not held by the family. The family has further advised Katy that it can give no assurances as to whether, or when, such a proposal might be made, or if made, whether such a proposal would be acceptable to Katy's board of directors.
 Headquartered in Elgin, Katy Industries is a producer of industrial products, industrial components and consumer products.
 -0- 12/18/92
 /CONTACT: Jacob Saliba, chairman and CEO, 617-266-4100 or William H. Murphy, president and COO, or J. Russell Jones, treasurer, 312-379-1121, all of Katy Industries/
 (KT)


CO: Katy Industries, Inc. ST: Illinois IN: MAC SU:

WB -- NY048 -- 8233 12/18/92 12:47 EST
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Publication:PR Newswire
Date:Dec 18, 1992
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