Haier drops bid to buy Maytag

Haier drops bid to buy Maytag
Date July 20, 2005
Section(s) Local News


Associated Press

Chinese appliance manufacturer Haier America and two investment partners are ending their bid to buy rival Maytag Corp.

Maytag said in a statement late Tuesday it was informed by Haier America, a subsidiary of Haier Group Ltd., that the company and partners Bain Capital and Blackstone Group would no longer pursue their bid.

Maytag did not release the Haier letter and company spokesman John Daggett declined further comment Tuesday.

Haier’s pullout came two days after appliance maker Whirlpool Corp. jumped into the bidding for Maytag with a $1.37 billion offer.

News of Haier’s decision to remove itself from bidding for Maytag pushed the stock price down. At 10 a.m. today, Maytag‘s stock was down $1.52 on the Haier news to $16.01 or 8.67 percent. Volume was 2.7 million shares.

Newton-based Maytag disclosed last month it was considering a preliminary $1.28 billion bid from Haier America and the investment firms that valued Maytag at $16 per share. Haier Group is China’s largest appliance manufacturer, producing refrigerators, laundry machines, dishwashers and small appliances.

Haier, which is based in the eastern Chinese city of Qingdao, was one of the first Chinese companies to expand internationally, setting up factories in Algeria, Mexico, Iran and Southeast Asia before it opened its first U.S. factory, in Camden, S.C. in 2000.

The unsolicited offer from Michigan-based Whirlpool, the nation’s largest appliance maker, values Maytag stock at $17 per share. Its offer includes payments in cash and stock.

Officials at Maytag have said the company would consider the Whirlpool bid but noted that directors have not changed their recommendation that shareholders approve the proposal from Triton.

In a letter dated Sunday, Whirlpool said it is “ready to immediately review the due diligence information you provided to Triton and are currently providing to the Haier America consortium. We and our advisors are also ready to immediately negotiate a definitive merger agreement with you. We anticipate that our agreement will be based substantially on your existing merger agreement with Triton.”

Whirlpool said that due to conditions in the Triton agreement, it must submit its offer for Maytag no later than Aug. 9. “We are prepared to meet this deadline. However, as each day forward is critically important to our doing so, your board must take action to permit us to begin our due diligence immediately.”

In May, Maytag‘s board accepted a $14-a-share proposal from an investment group, Triton Acquisition Holding Co., led by Ripplewood Holdings LLC, RHJ International and GS Capital Partners.

Maytag will begin mailing definitive proxy statements to shareholders today in advance of a scheduled vote Aug. 19 on the Triton takeover offer. The meeting will be held at 10:30 a.m. at the Sodexo DMACC Newton Conference Center auditorium in Newton.

Maytag is recommending that shareholders approve the Ripplewood bid, noting the merger cannot go forward without approval of a majority vote of the owners of the 79 million outstanding shares.

The proxy statement gives detailed information on the merger plan, including details on the formation of the deal, total costs anticipated in consummating the takeover and shareholder payout information.

If the deal is completed, Maytag would become a wholly-owned subsidiary of Triton Acquisition Holding. The company estimates the total amount necessary to complete the merger at approximately $1.65 billion, which includes shareholder payout, repayment or refinancing of existing debt and payment of fees and expenses. All details of the merger are expected to be completed before Dec. 15.


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