Maytag says Whirlpool offer may be better, proceeds slowly

Maytag says Whirlpool offer may be better, proceeds slowly
 
Date July 25, 2005
Section(s) Local News
Brief  
 
By Associated Press

and Daily News Staff

DES MOINES — Maytag Corp. said it has determined an $18-per-share purchase proposal from Whirlpool Corp. may be a better deal than one offered by a New York investment firm, but a company statement said Maytag remains hesitant to immediately open its books to Whirlpool.

Whirlpool on Friday increased its bid to acquire Maytag by $1 per share from $17 per share. The deal would be worth about $1.43 billion.

Maytag has signed an agreement to be bought by Triton Acquisition Holding Co., an investment group led by New York-based Ripplewood Holdings.

Triton has offered $14 per share, or about $1.13 billion.

Maytag shareholders are scheduled to vote on that offer on Aug. 19.

As part of the upped purchase proposal, Whirlpool also offered to pay a $40 million breakup fee, which Maytag has agreed to pay Triton if it backs out of that deal. Whirlpool would also be willing to offer Maytag a reverse break-up fee payable to Maytag if the proposal does not get regulatory approval.

Whirlpool issued a harsh criticism of Maytag officials Friday, saying the company was “jeopardizing this important opportunity for consumers, trade customers and shareholders of both Maytag and Whirlpool.”

Whirlpool CEO Jeff M. Fettig said Maytag should open its books so Whirlpool could study finances and immediately enter into negotiations for a purchase deal.

He gave Maytag officials until 6 p.m. EDT Sunday to answer.

Maytag‘s statement, released just minutes before the deadline, said it had concluded the Whirlpool offer was likely to prove better than the Triton deal and had a reasonable chance of gaining regulatory approval. But Maytag‘s board of directors continue to support the Triton offer, the statement said.

Maytag had previously asserted concerns over whether a Whirlpool purchase of Maytag would be approved by federal regulators, who might have antitrust concerns about the combination of the leading appliance manufacturer with the nation’s third largest.

Whirlpool has said it studied the antitrust issue extensively and offered assurance that merging the two companies would be approved.

Maytag also said Triton asserted that Whirlpool does not meet the criteria required to be considered as another suitor. The agreement with Triton would require Maytag to pay a $40 million breakup fee if Maytag pursues another offer.

Maytag believes that its actions are in accord with the merger agreement and do not give Triton Acquisition any termination rights,” the Maytag statement said.

Maytag‘s board was still hesitant to open its books to Whirlpool because of concerns over the timing of the completion of a purchase and the valuation of stock in the deal, which would pay Maytag shareholders half in cash and half in Whirlpool stock. Other concerns included the time Whirlpool would take to study Maytag finances.

Maytag noted that before it would be willing to share competitively sensitive information it would require greater certainty with respect to these and other issues,” the statement said.

Maytag spokesman John Daggett declined to comment further.

Whirlpool spokesman Tom Kline said the company would have little comment until after it studied the Maytag statement.

“Whirlpool acknowledges Maytag‘s response, which we are now in the process of reviewing,” he said.

What a Whirlpool purchase of Maytag would mean for Newton remains unclear.

Last Friday in a conference call on second quarter earnings, Maytag CEO Ralph Hake spoke briefly about the companies cost cutting plans and mentioned the Newton facility.

“Our discussions are ongoing with the labor unions in both our Newton and North Canton facilities to identify cost improvement,” he said. “Over the next few months, we expect to finalize our operational plans to migrate viable product lines to low-cost manufacturing locations”

Hake opted not to answer questions from investors during the conference call, citing the pending acquisition of the company as the reason.

Maytag stock was up 95 cents this morning to $17.15.

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