Maytag Corp. rejected offer last year by Ripplewood

Maytag Corp. rejected offer last year by Ripplewood
 
Date July 01, 2005
Section(s) Local News
   
 
By DAVID PITT

AP Business Writer

DES MOINES (AP) — Documents filed with the Securities and Exchange Commission indicate Maytag Corp. could have been sold to private investors last year for as much as $23.40 a share.

Company officials, however, rejected the initial offer from Ripplewood Holdings only to accept a much lower offer last month — $14 a share, according to the documents filed Thursday.

Ripplewood first approached Maytag in early 2004, but CEO Ralph Hake told Ripplewood CEO Timothy Collins that the Newton-based appliance maker was not interested, according to a preliminary proxy statement.

In August 2004, the Maytag board discussed the offer in executive session and “determined that it would not pursue a strategic transaction at that time,” the statement said.

Several discussions with Ripplewood occurred last fall and, on Dec. 2, Ripplewood submitted a proposal to buy Maytag for $23.40 a share.

The board rejected the offer six days later.

By January, however, the company had determined that its 2005 earnings forecasts were below analysts’ projections. Moody’s and Standard & Poor’s downgraded the company’s long-term debt ratings.

Ripplewood’s offer began shrinking.

On Feb. 22, 2005, Ripplewood submitted an acquisition proposal of $17.25 per share, noting the company’s dour forecast and sliding stock price. Maytag shares were trading at $15.57 a share on Feb. 18, down from $20.37 on Dec. 1.

Maytag board members again declined the offer.

In early April, Maytag approached Ripplewood about the possibility of a deal. Talks in April and May, while Maytag‘s stock continued its decline and after another downgrade in its debt rating, resulted in a final offer of $14 per share.

At a May 11 meeting, Hake said the offer did not reflect the value of the company and that he would not vote for it. For eight days, Maytag‘s legal advisers continued negotiating a merger agreement with Ripplewood.

On May 19, all directors except Hake recommended approval of a merger.

That evening, Maytag and Ripplewood, now known as Triton Acquisition Holding, announced a deal.

In the days following the announcement, Maytag and its representatives contacted 36 other parties to see if they had any interest in Maytag. The company met with several parties and several looked into Maytag‘s finances, the SEC documents said.

The only other offer came in June, a preliminary nonbinding proposal for $16 a share from an investment group led by Haier America, the U.S. sales subsidiary of Haier Group, a Chinese appliance maker.

Last week, a Maytag board committee instructed its advisers to move quickly to evaluate the second proposal. In response, Triton told Maytag to stop sharing information with the Haier-led group, threatening to terminate its agreement.

Maytag, in its proxy statement, said it believes it has the right to pursue other offers. Company spokesman John Daggett declined to comment further.

A telephone message left for a Triton spokesman was not immediately returned.

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