Haier may bid for Maytag; Hake urges patience

Haier may bid for Maytag; Hake urges patience
 
Date June 14, 2005
Section(s) Local News
Brief  
 
By PETER HUSSMANN

Editor

Maytag‘s stock price continued to rise today on word that competing bids for the company may be forthcoming while CEO Ralph Hake urged patience to employees.

Chinese appliance maker Haier Group was reported today to be considering a bid for the U.S. appliance maker, according to the Financial Times. On Monday, Reuters reported that the Blackstone Group, a private equity firm, was also considering a bid. Other private equity groups considering bids include Bain Capital and Kohlberg Kravis Roberts, news reports indicated.

Maytag‘s stock closed up 75 cents at $15.24 on Monday on news of the Blackstone potential offer. The stock continued its upswing this morning, rising as high as $15.66 before edging downward.

Last month, Maytag agreed to be taken over by Ripplewood Holdings of New York in a $2.1 billion deal that included the purchase of outstanding stock at $14 a share plus the assumption of $975 million debt.

The merger deal included a clause that allows Maytag to solicit other bids for a 30-day period. That window expires on Friday.

The report in the Financial Times, citing a confidential source close to the situation, said that there was no certainty rival bids would be forthcoming from either Haier or the private equity firms.

Maytag spokesperson John Daggett declined comment.

An acquisition of Maytag by Haier would make it one of the top four appliance manufacturers in the U.S., alongside General Electric, Whirlpool and Electrolux. It opened its first U.S. manufacturing plant in South Carolina in 1999.

Maytag CEO Hake tried to calm employees today, saying the focus should remain on the day-to-day operations of the corporation.

In a filing with the Securities and Exchange Commission, Hake gave employees an update on the potential sale of Maytag to Ripplewood.

“Many employees have expressed their concerns and interest in the status of the overall acquisition,” Hake said in the filing. “I know that you have many questions regarding the future state of the organization and your future employment. I can tell you that you will see no change in the aggregate value of your benefits through the remainder of 2005; except those involving Maytag stock, which will be delisted when the transaction closes. Beyond that, however, we simply do not have enough information at this time to have answers to your most basic questions.”

Hake also outlined the process through which the proposed sale will be determined over the next several weeks. He said a preliminary proxy statement will be filed with the SEC followed by a final proxy statement, which will be mailed to all Maytag shareholders. After that, a shareholder meeting will be held in Newton to vote on the proposed sale. If approved, and regulatory approval is granted, the closing of the transaction will take place soon after.

“I know that it is difficult to work in this uncertain environment; however, in this period it is important that we focus our energies on the things that we are responsible for,” the filing states. “Regardless of the result of the Ripplewood merger down the road, today we have a business to manage. We have entered the final month of our second quarter and we must continue to concentrate on delivering our sales and earnings results. After all, we are still a public company and we must not only continue to fulfill our commitments to our shareholders, but also those to our important customer partners.”

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