LILLY INDUSTRIES INC, SC 13D, 1998-03-20

LILLY INDUSTRIES INC
SC 13D, 1998-03-20
PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODS

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Amendment No. )*
of
Tweedy, Browne Company LLC

SCHEDULE 13D
(Amendment No. )*
of
Vanderbilt Partners, L.P.

Under the Securities Exchange Act of 1934

LILLY INDUSTRIES, INC.
(Name of Issuer)

Class A - Common Stock, No Par Value
(Title of Class of Securities)

532491107
(CUSIP Number)

John D. Spears
52 Vanderbilt Avenue
New York, New York 10017
(212) 916-0600
(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)

UPON EXAMINATION
OF ISSUER'S LATEST FILING ON FORM 10-K
DATED FEBRUARY 27, 1998
(Date of Event which Required Filing of this Statement)
<PAGE> 2
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].

Check the following box if a fee is paid with the statement [ ]. (A fee is not
required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)

* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act,
but shall be subject to all the provisions of the Act (however, see the Notes).
<PAGE> 3

- --------------------------- ---------------------------
CUSIP No. 532491107 SCHEDULE 13D Page ___ of ___ Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Vanderbilt Partners, L.P. ("Vanderbilt")
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC USE ONLY

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*

WC and BK
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
14,100 shares, except that the general
partners in Vanderbilt, solely by reason of
their positions as such, may be deemed to have
shared power to vote these shares.
NUMBER OF -------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 shares
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 14,100 shares, except that the general
WITH: partners in Vanderbilt, solely by reason of
their positions as such, may be deemed to
have shared power to vote these shares.
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0 shares
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

14,100 shares
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.06%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*

PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!

SEC 1746 (9-88) 2 of 7

<PAGE> 4

Tweedy, Browne Company LLC ("TBC")
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC USE ONLY

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*

00
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
TBC has sole voting power with respect to
1,166,825 shares held in certain TBC accounts
(as hereinafter defined). Additionally,
certain of the general partners of TBC may be
deemed to have sole power to vote certain
shares as more fully set forth herein.
NUMBER OF -------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 shares
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0 shares, except that certain of the general
WITH: partners of TBC may be deemed to have sole
power to vote certain shares as more fully set
forth herein.
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
1,284,095 shares held in accounts of TBC (as
hereinafter defined).
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

1,284,095 shares
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[x]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.66%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*

BD IA & 00
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!

SEC 1746 (9-88) 2 of 7

<PAGE> 5
PRELIMINARY NOTE

This Statement on Schedule 13D is being filed because the filing
persons may be deemed to be members of a group comprised of Tweedy, Browne
Company LLC ("TBC") and Vanderbilt Partners, L.P. ("Vanderbilt"), which group
may be deemed to be the beneficial owner in the aggregate of in excess of 5% of
the Common Stock of Lilly Industries, Inc. However, the filing of this Schedule
13D should not be deemed an admission that TBC and Vanderbilt comprises a group
within the meaning of Section 13(d)(3) of the Securities and Exchange Act of
1934, as amended (the"Act").

ITEM 1. SECURITY AND ISSUER

This Schedule 13D relates to the Class A - Common Stock, no par value
(the "Common Stock"), of Lilly Industries, Inc. (the "Company"), which, to the
best knowledge of the persons filing this Schedule 13D, is a company organized
under the laws of Indiana, with its principal executive offices located at 733
South West Street, Indianapolis, IN 46225.

ITEM 2. IDENTITY AND BACKGROUND

(a) The persons filing this Schedule 13D are (i) Tweedy, Browne Company
LLC ("TBC"), a Delaware limited liability company, (ii) Vanderbilt Partners,
L.P. ("Vanderbilt"), a Delaware limited partnership. Annexed as Exhibit 99.1,
which is incorporated by reference herein, is an agreement between TBC and
Vanderbilt that this Schedule 13D is filed on behalf of each of them. The filing
of this Schedule 13D should not be deemed an admission that TBC and Vanderbilt
comprises a group within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934 (the "Act").

This Schedule 13D contains information regarding shares of Common Stock
that may be deemed to be beneficially owned by TBC. Such shares are held in the
accounts of various customers of TBC, with respect to which accounts TBC has
investment discretion (the "TBC Accounts"), and with respect to some of which it
has obtained sole or shared voting power.

The general partners of Vanderbilt are Christopher H. Browne, William
H. Browne and John D. Spears (the "General Partners"). The members of TBC are
Christopher H. Browne, William H. Browne, John D. Spears, Thomas H. Shrager,
Robert Q. Wyckoff, Jr. and Holdings (the "Members"). By reason of their
positions as such, the members of TBC may be deemed to control TBC and the
general partners of Vanderbilt may be deemed to control Vanderbilt,
respectively.

(b) The business address of each of TBC, Vanderbilt and the General
Partners is 52 Vanderbilt Avenue, New York, New York 10017.

(c) TBC is engaged primarily in the business of a securities broker and
dealer and investment adviser, is registered as a broker-dealer and investment
adviser with the Securities and Exchange Commission, and is a member of the
National Association of Securities Dealers, Inc.

Vanderbilt is a private investment partnership and is currently, and at
all relevant times was, engaged primarily in the business of investing in
securities for its own account.

The present principal occupation of each of the General Partners is
serving as such for Vanderbilt. The present principal occupation of the Members
of TBC is serving as such. Holdings is wholly owned by Affiliated Managers
Group, Inc., a Boston-based holding company which makes equity investments in
investment management firms, in which management personnel retain a significant
interest in the profits of the business. The principal business address of each
of TBC and Vanderbilt is set forth above.

(d) None of TBC, Vanderbilt, nor any General Partner or Member has,
during the last five years, been convicted in any criminal proceeding (excluding
traffic violations and similar misdemeanors).
<PAGE> 6
(e) None of TBC, Vanderbilt, nor any General Partner or Member has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which proceeding it
or he was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violations with respect thereto.

(f) Vanderbilt is a Delaware limited partnership. TBC is a Delaware
limited liability company. Each of the General Partners and Members is a citizen
of the United States of America, with the exception of Holdings, which is a
Delaware corporation.

ITEM 3. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION

As of the date hereof, the number of shares with respect to which TBC
may be deemed to be the beneficial owner is 1,284,095 shares of Common Stock
(the "TBC Shares"), all of which shares were purchased in open market
transactions. The aggregate cost of the TBC Shares, including brokerage
commissions, was $21,476,343.

The TBC Shares are held in the TBC Accounts, the funds therefor coming
from the funds on hand in each individual managed account and in certain
instances from standard margin account borrowings from brokerage accounts
maintained at Fleet Clearing Corporation. It is expected that funds used by the
TBC Accounts to purchase additional shares of Common Stock, if additional shares
are purchased by the TBC Accounts (see Item 4 hereof), will come from the funds
on hand for each individual managed account, which funds on hand at any time and
from time to time may include, among others, funds borrowed pursuant to margin
accounts maintained at Fleet Clearing Corporation. Borrowings made by certain
TBC Accounts pursuant to such margin accounts are secured by margin securities
owned by the respective accounts, including some of the TBC Shares. Interest on
outstanding borrowings under such margin accounts ranges from 1/2% to 2% over
the brokers' call rate in effect from time to time at Chase Manhattan Bank, New
York, New York, depending upon the amount of outstanding borrowings at any given
time.

As of the date hereof, Vanderbilt beneficially owns directly 14,100
shares of Common Stock (the "Vanderbilt Shares"), all of which shares were
purchased in open market transactions hereof.) The aggregate cost of the
Vanderbilt Shares, including brokerage commissions, was $184,387.

It is expected that funds used by Vanderbilt to purchase additional
shares of Common Stock, if additional shares are purchased by Vanderbilt (see
Item 4 hereof), will come from Vanderbilt's general funds, which include cash
and cash equivalents on hand and in banks.

Vanderbilt's funds may include funds borrowed pursuant to a Line of
Credit Agreement between Vanderbilt and Boston Safe Deposit and Trust Company.
Pursuant to the Line of Credit Agreement, Vanderbilt may borrow up to $2,000,000
at the brokers' call rate charged from time to time by Boston Safe Deposit &
Trust Company. Borrowings made by Vanderbilt pursuant to the Line of Credit
Agreement with Boston Safe Deposit and Trust Company are secured by securities
owned by Vanderbilt; such borrowings are not secured by any Vanderbilt Shares.
No borrowings from Boston Safe Deposit and Trust Company were made by Vanderbilt
for the purpose of acquiring the Vanderbilt Shares. Vanderbilt reserves the
right to include all or any of the shares of Common Stock owned by it at any
time or from time to time, among the securities that serve as collateral for
such borrowings, subject to compliance with any applicable statutes and
regulations.

ITEM 4. PURPOSE OF TRANSACTION

Each of TBC and Vanderbilt has acquired the shares of Common Stock
owned by it for investment purposes and for none of the reasons enumerated in
Item 4 of Schedule 13D, except that TBC and Vanderbilt may dispose of all or
some of the TBC Shares and the Vanderbilt Shares, respectively, or may acquire
additional shares of Common Stock from time to time, depending upon price and
market conditions, evaluation of alternative investments, and other factors.
Currently, TBC and Vanderbilt intends to acquire additional shares of Common
Stock in the open market, depending upon the price of the Common Stock from time
to time.
<PAGE> 7
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER

(a) As of the date hereof, TBC may be deemed to be the beneficial owner
of an aggregate of 1,284,095 shares of Common Stock, which constitutes
approximately 5.66% of the 22,702,000 shares of Common Stock which TBC believes
to be the total number of shares of Common Stock outstanding. The TBC Shares are
held in the TBC Accounts.

As of the date hereof, Vanderbilt beneficially owns directly 14,100
shares of Common Stock, which constitutes approximately 0.06% of the 22,702,000
shares of Common Stock which Vanderbilt believes to be the total number of
shares of Common Stock outstanding.

Each of TBC and Vanderbilt disclaims that it is the beneficial owner of
any of the shares of Common Stock held in the TBC Accounts. The aggregate number
of shares of Common Stock with respect to which TBC and Vanderbilt could be
deemed to be the beneficial owner as of the date hereof, is 1,298,195 shares,
which constitutes approximately 5.72% of the 22,702,000 shares of Common Stock,
which the filing persons believe to be the total number of shares of Common
Stock outstanding, but nothing contained herein shall be construed as an
admission that TBC is the beneficial owner of any of the TBC Shares.

The aggregate number of shares and percentage of Common Stock with
respect to which each of the General Partners and Members may be deemed to be
the beneficial owner by reason of his being a general partner of Vanderbilt, or
a member of TBC, is 1,298,195 shares, which constitutes approximately 5.72% of
the 22,702,000 shares of Common Stock outstanding. However, nothing contained
herein shall be construed as an admission that any of the General Partners is
the beneficial owner of any shares of Common Stock, except as set forth herein
as expressly and admittedly being beneficially owned by a particular General
Partner.

Each of TBC and Vanderbilt disclaims beneficial ownership of Common
Stock held by the other. Except as described herein, to the best knowledge of
TBC and Vanderbilt, no person who may be deemed to comprise a group with any of
TBC, Vanderbilt, or any other person named in Item 2 hereof, beneficially owns
any shares of Common Stock.

(b) TBC has investment discretion with respect to 1,284,095 shares of
Common Stock held by the TBC Accounts and has sole power to dispose or direct
the disposition of all of such shares. Of these shares of Common Stock, TBC has
sole power to vote or to direct the voting of 1,166,825 shares of Common Stock
held in certain TBC Accounts.

Each of the Members of TBC, solely by reason of their positions as
such, may be deemed to have (i) shared power to dispose of or to direct the
disposition of all of the shares of Common Stock held in the TBC Accounts; and
(ii) shared power to vote or direct the vote of 1,166,825 shares of Common Stock
held in certain TBC Accounts.

Vanderbilt has the sole power to vote or direct the voting of and
dispose or direct the disposition of the Vanderbilt Shares. Each of the General
Partners of Vanderbilt, solely by reason of their positions as such, may be
deemed to have shared power to vote or direct the vote of and to dispose or
direct the disposition of the Vanderbilt Shares.

<PAGE> 8
(c) During the sixty-day period ended as of the date hereof, Vanderbilt
did not effect any transactions in Common Stock. During the sixty-day period
ended as of the date hereof, TBC effected transactions in Common Stock in open
market transactions as follows:

<TABLE>
<CAPTION>
NO OF SHARES PRICE
TBC ACCOUNTS PURCHASED SOLD PER SHARE

(d) To the best knowledge of TBC, each of the persons maintaining an
account with TBC has the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the shares of Common Stock
held in said person's TBC Account.

To the best knowledge of Vanderbilt, no person other than Vanderbilt
has the right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, the Vanderbilt Shares, except that the General
Partners in Vanderbilt may be deemed to have such rights and powers solely by
reason of being general partners in Vanderbilt.

(e) Not applicable.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.

Except as otherwise described herein, none of TBC or Vanderbilt, nor,
to the best knowledge of TBC, or Vanderbilt, any other person named in Item 2
hereof, has any contract, arrangement, understanding or relationship with
respect to any securities of the Issuer.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS

Exhibit 99.1 - - Agreement pursuant to Rule 13d-1(f)(1)(iii).
<PAGE> 9
SIGNATURE

Each of Tweedy, Browne Company LLC and Vanderbilt Partners, L.P., after
reasonable inquiry and to the best of its knowledge and belief, hereby certifies
that the information set forth in this Statement (which includes the Exhibit
annexed hereto) is true, complete and correct.

TWEEDY, BROWNE COMPANY LLC

/s/Christopher H. Browne
By_________________________
Christopher H. Browne
Member

VANDERBILT PARTNERS, L.P.

/s/Christopher H. Browne
By________________________
Christopher H. Browne
General Partner

Dated: March 17, 1998

<PAGE> 1
EXHIBIT 99.1

AGREEMENT dated as of March 17, 1998 between Tweedy, Browne Company
LLC, a Delaware limited liability company ("TBC") and Vanderbilt Partners L.P.,
a Delaware limited partnership ("Vanderbilt").

WITNESSETH:

WHEREAS, TBC and Vanderbilt may be deemed to have acquired, in the
aggregate, beneficial ownership of more than five percent of the Class A -
Common Stock (the "Common Stock") of Lilly Industries, Inc. (the "Company") and

WHEREAS, pursuant to Rule 13d-1 under the Securities Exchange Act of
1934 (the "Act"), a Statement on Schedule 13D must be filed by any person who
acquires more than five percent of registered equity securities; and

WHEREAS, in accordance with Rule 13d-1(f) of the Act, only one such
Statement need be filed whenever two or more persons are required to file such a
Statement pursuant to Section 13(d) of the Act with respect to the same
securities, provided that said persons agree in writing that such Statement is
filed on behalf of each of them.

NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:

TBC and Vanderbilt do hereby agree, in accordance with Rule 13d-1(f)
under the Act, to file one Statement on Schedule 13D relating to their ownership
of the Common Stock, and do hereby further agree that said Statement shall be
filed on behalf of each of TBC and Vanderbilt. Nothing herein, however, shall
be, or shall be deemed to be, an admission that the parties hereto, or any of
them, are members of a "group" (within the meaning of Section 13(d) of the Act
and the rules and regulations promulgated thereunder) with respect to any
securities of the Company.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

TWEEDY, BROWNE COMPANY LLC VANDERBILT PARTNERS, L.P.

/s/Christopher H. Browne /s/Christopher H. Browne
By_________________________ By_________________________
Christopher H. Browne Christopher H. Browne
Member General Partner