Spectrum Brands sets low; sale of unit called off

In May, Spectrum said it planned to sell the business to appliance maker Salton Inc. for $692.5 million in cash, but Chief Executive Kent Hussey said Monday the Atlanta company wasn't able to get the consent of senior lenders to close on a basis in its shareholders' best interests.

Shares declined 30 cents, or 13.3 percent, to $1.95, after bottoming at $1.87 earlier in the session.

Oppenheimer & Co. analyst Joseph Altobello, who rates the stock "Underperform," expects rising commodity costs and sluggish consumer demand to weigh on results.

Altobello also said the sale's termination makes it harder for management to make balance sheet improvements.

"This is not the end of the world for Spectrum, although it does represent a setback for management in its attempt to de-lever its balance sheet," Altobello wrote in a client note.