Archive for August, 2005

Vilsack to hear concerns of Maytag families

August 30, 2005
Vilsack to hear concerns of Maytag families
 
Date August 30, 2005
Section(s) Local News
 
(AP) — Gov. Tom Vilsack will visit Newton on Labor Day to hear concerns about the future of the Maytag plant.

“Anxiety is very high right now,” the governor said Monday. “The message we want to send is we understand that people are anxious.”

Maytag Corp. and Whirlpool Corp. have signed an agreement for Whirlpool to buy the Newton-based appliance maker.

In addition, Maytag announced just last week plans to lay off 200 workers, leaving the plant with about 1,000 production workers. The layoffs are to take effect Sept. 6.

Vilsack said he will be joined by U.S. Rep. Leonard Boswell and Newton Mayor Chaz Allen.

Vilsack said with Maytag in transition, he knows that many people in the central Iowa town 15,579 have questions.

“I want to make sure there is an opportunity for those questions to be asked,” Vilsack said.

The listening session will be held at 3 p.m. at the Maytag Bowl at Maytag Park.

Hake tries to calm jittery Maytag workers

August 23, 2005
Hake tries to calm jittery Maytag workers
 
Date August 23, 2005
Section(s) Local News
Brief  
 
By PETER HUSSMANN

Editor

Maytag CEO Ralph Hake tried to calm jittery employees on Monday after the 112-year-old Newton-based appliance manufacturer agreed to be bought out by its largest rival.

In a letter issued after Maytag agreed to be acquired by Whirlpool, Hake told employees that it’s business as usual as the long process to complete the acquisition moves forward.

“I want to remind you that Maytag is a great company, and we’re still in business to take care of our customers by producing consumer-driven products,” Hake said. “That goal does not change, even as we look at an upcoming merger. We need to continue to do our jobs — selling, distributing, manufacturing and developing our products. Each of us should continue to come to work every day with a strong commitment to do our jobs to the best of our abilities with pride in our accomplishments.”

Late Monday morning, Maytag and Whirlpool entered into a definitive agreement where the Benton Harbor, Mich.-based company will acquire all of Maytag‘s outstanding shares in a cash and stock merger valued at $21 per share. The deal, including the assumption of $977 million of Maytag debt, is valued at $2.7 billion.

In his letter to employees, Hake acknowledged that a combined Maytag-Whirlpool operation will result in the loss of jobs, but he attempted to mitigate the impact locally by saying assurances have been received that all employees would be considered during the integration of the two companies.

“Understandably, I realize that many of you want to know how a possible merger with Whirlpool may impact your job; however, it’s far too early to talk about how any given department or individual job may be affected,” Hake said. “I do recognize that in any combination like this, where duplicate positions may exist, it is reasonable to expect that some jobs will be eliminated. Whirlpool assures me that the best talent and contributors available — regardless of whether they’re currently Maytag or Whirlpool employees — are likely to be considered for assignments in the new company. Many of you know this because of your experiences with the integration processes when Maytag acquired Amana, Jenn-Air and Magic Chef.

“In recent conversations that I have had with Jeff Fettig, Whirlpool chairman and CEO, he has assured me that Whirlpool’s goal is to create a combined company with the world-class talent and resources required to successfully compete in this global business — a goal that should not be foreign to anyone at Maytag. He said that together, Whirlpool and Maytag will develop a process to identify specific positions and job opportunities, with a fair and open evaluation for selecting the best candidates for each available position. Above all, Jeff has made the commitment that all employees will be treated with the deserved respect and dignity throughout the transition period of the integration.”

Principles in the deal offered supportive assessments of the planned merger.

“The combination of Whirlpool and Maytag will create very substantial benefits for consumers, trade customers and our shareholders,” said Whirlpool CEO Jeff Fettig. “This transaction will enable us to achieve significant efficiencies and better asset utilization. It will also allow us to offer a wider range of products to a much broader consumer base.”

Maytag board of directors member Howard Clark said the deal was the best alternative for the struggling corporation.

“After careful consideration in conjunction with our financial and legal advisors and an independent committee of Maytag‘s board consisting of all non-management directors, we re-evaluated the transaction with (Ripplewood) and concluded that the Whirlpool agreement is superior and is in the best interest of our shareholders,” he said.

The Whirlpool deal was made possible after Ripplewood Holdings, the lead investor in a private equity consortium’s attempt to take control of the company, declined to raise its $14 cash offer for Maytag stock.

“We have carefully considered all our options and concluded that it is not in the best interests of Ripplewood and our investor group to match Whirlpool’s offer or submit a new bid for Maytag,” said Timothy C. Collins, chief executive officer of Ripplewood, in a statement. “We express our hope that Maytag, its shareholders, employees and the communities of which it is a part are well served by its agreement with Whirlpool, and we wish them well.”

Analysts covering the home appliance industry speculated during the bidding war for Maytag that a Whirlpool takeover would have the most dramatic negative impacts for Newton. The analysts said that Whirlpool would likely close the Maytag corporate headquarters fairly quickly. Production at the Newton laundry plant could possibly remain under the merger, although production of some Maytag products would likely migrate to Whirlpool’s low-cost facilities in Mexico and Asia. Ripplewood said it would retain Maytag‘s current management structure in Newton and its Iowa-based plants, at least temporarily.

Maytag employs approximately 18,000 people worldwide, with about 2,000 to 2,500 at its headquarters and production facilities in Newton.

A combined Whirlpool-Maytag company would create the world’s largest home appliance manufacturer, pushing it ahead of Sweden’s Electrolux. The company would capture approximately 50 percent of the North American market in major appliances. In laundry, the combined companies would capture as much as 70 percent of the market share, an issue that will drive close federal regulatory scrutiny.

Whirlpool has said the merger is pro-competitive and has offered several reasons why the merger will pass Federal Trade Commission review. The company cites the increasing competitiveness of the home appliance industry with a wave of Asian companies making inroads in the North American market. Whirlpool further notes that it has received support from major appliance retailers and buyer groups, including the support of the chairman of Lowes, the second largest retailer of appliances in the U.S.

“Overall this transaction will translate into better products, quality and service, as well as efficiencies, which will enhance our ability to succeed in the increasingly competitive global home appliance industry,” Fettig said. “We remain highly confident that we will receive regulatory clearance for this transaction in a timely manner.”

Whirlpool has agreed to pay Maytag $120 million “reverse break-up fee” if it is unable to gain regulatory clearance. The agreement gives Whirlpool until the end of 2006 to complete the merger.

In addition to regulatory approval, the merger also must gain the support of Maytag shareholders. In announcing the deal, the companies said a shareholder vote on acquisition is expected to be held before the end of the year with the transaction closing sometime in the first quarter of 2006.

In bowing out of the bidding war for Maytag, Ripplewood was paid a $40 million termination fee by Maytag that was reimbursed by Whirlpool. In addition, Whirlpool is providing up to $15 million to assist Maytag in retaining key employees. The shareholder meeting scheduled for Sept. 9 has been cancelled.

The agreement also contains termination rights for both Whirlpool and Maytag that if enacted could force Maytag to pay Whirlpool $60 million and reimburse it for its $40 million buyout of the Ripplewood deal.

Maytag shareholders will receive, for each share held, $10.50 in cash and a fraction of a share of Whirlpool stock for each Maytag share they own. If the average price of Whirlpool stock during a 20-day period just prior to the close is $91.79 or greater, a Maytag shareholder would receive 0.1144 of a share of Whirlpool stock for each Maytag share they hold. If the the price of Whirlpool is $75.10 or less, the stock fraction would amount to 0.1398. Between the two prices, the exchange ratio will vary proportionately.

The letter to Maytag employees also included information pertaining to Maytag‘s current benefit and pension plans. The company’s current 401(k) program will continue until at least Dec. 31, 2006, but upon completion of the merger, the match will no longer be made in Maytag stock. The existing benefit plans also will remain in effect until the end of 2006.

The information provided to employees stated that Maytag has $1.2 billion invested in its pension fund and that any benefits that have accrued will be retained by employees, even if the plan is terminated in the future.

Hake urged employees to continue giving their best effort.

“While the merger agreement is pending, we need to remain focused on our business — anything short of our best efforts can weaken our overall position in the marketplace, which would severely impact our business should this deal fail to be completed for any reason.

“During the coming months, it is my personal hope that we all pull together to move our Maytag business forward and in the strongest possible position.

“I know this is a very stressful time for you and your families, and we will do everything we can to see that this process reaches a conclusion sooner than later.

“While we have a long way to go in the overall process, it’s important to remember that there are many people depending on us — most of all our shareholders and our customers. I am confident we won’t let them down.”

Report: Ripplewood concedes Maytag takeover

August 22, 2005
Report: Ripplewood concedes Maytag takeover
 
Date August 22, 2005
Section(s) Local News
Brief  
 
By PETER HUSSMANN

Editor

The three-month bidding war for Maytag may come to an end today after sources close to Ripplewood Holdings said the private equity firm would not increase its offer to take control of 112-year-old Newton-based corporation.

The Wall Street Journal, citing “a person familiar with the matter,” said Ripplewood will stay with its $14 a share cash bid for Maytag, a deal valued at about $1.13 billion, not counting the nearly $1 billion in debt the firm agreed to assume.

Ten days ago, the Maytag board of directors voted to back Whirlpool’s revised $21 a share cash and stock offer saying it was a better deal from a financial standpoint to shareholders and is likely to pass regulatory scrutiny. In making the announcement Aug. 12, the board recommended that shareholders vote against the Ripplewood bid in light of Whilrpool’s $1.68 billion offer, not counting the assumption of Maytag debt.

Late last week, Maytag said it had notified Ripplewood of its decision in favor of Whirlpool, adding that it can terminate the agreement with the private equity firm if it makes a similar determination on or after today, taking into account any revised offer from Ripplewood. The Whirlpool offer remains open until noon on Tuesday.

Whirlpool’s acquisition of Maytag would create the world’s largest appliance manufacturer, accounting for nearly half of the U.S. market and nearly 80 percent of the North American laundry business. The Benton Harbor, Mich.,-based company raised its bid for Maytag three times since entering the bidding fray.

Whirlpool has agreed to provide Maytag $120 million should federal regulators block the merger. The company would also pay $15 million for the retention of Maytag employees and pay the $40 million break-up fee Ripplewood is entitled should Maytag‘s board terminate the deal.

Analysts covering the home appliance industry have said that Whirlpool would likely attempt to cut Maytag‘s expenses by shifting manufacturing to its offshore locations and merging other Maytag operations, like information technology, research and development, purchasing and distribution under Whirlpool’s platform.

Should the Ripplewood deal be terminated, the merger is expected to face strict federal regulatory scrutiny. In response, Whirlpool said it has secured support from nearly all of its top 20 retail customers and buying groups, including a voice of support from the CEO of Lowe’s, the nation’s No. 2 U.S. seller of home appliances.

Antitrust scrutiny is expected to take several months.

Ripplewood had been trying to acquire Maytag at least since December 2004, according to Securities and Exchange Commission filings. Its bids repeatedly fell after Maytag was unable to meet market targets. The Maytag board of directors approved the $14 a share takeover offer on May 19.

Maytag sets more layoffs

August 19, 2005
Maytag sets more layoffs
 
Date August 19, 2005
Section(s) Local News
Brief  
 
(AP, Newton Daily News) — More layoffs are in store for Maytag Corp., a move that comes as the nation’s third largest appliance maker sits on the sale block.

The company plans to lay off another 200 workers at its flagship manufacturing operations in its hometown of Newton, a union official said Thursday.

“It’s sad to see your work force depleted . . . in a down, down spiral, and you just feel like you’re powerless,” said Ted Johnson, president of United Auto Workers Local 997, which represents Maytag production workers in Newton. Nearly all of them work in a factory that makes washers and dryers.

The layoffs take effect Sept. 6, the day after Labor Day. The move will leave about 1,000 production workers on the job, Johnson said.

He said in addition to the 200 layoffs, part of the plant will shut down next week for inventory adjustment. The action will idle about 350 workers, but only for one week.

Maytag spokesman John Daggett said the layoffs are in response to reduced consumer demand for washers and dryers made in Newton.

“The retail market is moving away from the products made in Newton,” he said. “We are adjusting our employment levels in response to the changing market demand.”

Last week, Maytag‘s board withdrew its recommendation of the pending $14 per share, or $1.13 billion, cash offer from Triton Acquisition Holding, a group of investment companies led by New York-based Ripplewood Holdings. Maytag notified Triton on Monday that it favored a Whirlpool Corp. offer of $21 a share, or $1.79 billion.

Maytag has postponed a meeting of shareholders from Aug. 30 to Sept. 9 to permit the company additional time to distribute proxy information.

Maytag‘s production work force in Newton was about 2,500 in 2002. The company, however, has trimmed the number in a series of layoffs, saying that Newton is its highest-cost plant and won’t be eligible to receive new product lines unless costs are reduced. Concessions production workers approved in a contract adopted after a three-week strike last summer were not enough to gain Newton a new product platform, company officials said.

Maytag is also reviewing its “manufacturing footprint,” saying a final decision could come within the next few months and may mean the closure of the Newton plant and another Maytag operation in North Canton, Ohio.

Without new product lines, Maytag has said, plant employment will decline over time as customers shift to new product lines and the demand drops for machines made in Newton.

The Newton production work force was estimated at about 1,355 earlier this year. Maytag doesn’t disclose work force numbers at its production and office locations.

Maytag stock closed Thursday at $18.70, down 6 cents from Wednesday’s close on the New York Stock Exchange. It was down another nickel in early trading today.

Grassley’s tour makes a local stop

August 19, 2005
Grassley’s tour makes a local stop
 
Date August 19, 2005
Section(s) Local News
Brief  
 
By JOHN JENNINGS

NDN Staff Writer

It is not likely that a more diverse group of people have gathered on the Harlan Roorda farm southeast of Prairie City than the one Iowa Senator Chuck Grassley brought with him on Thursday afternoon.

Representatives from nearly 70 countries gathered in Roorda’s backyard, sitting on bales of hay to get a feeling for rural Iowa life.

Grassley’s Ambassadors Tour made the stop at the Roorda farm to “showcase Iowa’s resources, facilitate greater economic collaboration between Iowa and other countries and expose Iowa to the rich diversity of the world community,” Grassley said in a press release.

Following brief remarks from Grassley, the ambassadors were free to tour the Roorda farm, including the corn and soybean fields, cattle lots and view the farm machinery.

Every other year, Grassley invites each country with an embassy located in Washington, D.C., to send their ambassador and spouse to Iowa. If the ambassador is unable to participate, the embassy has the option of sending another designee.

Incredibly, Grassley is the only senator who organizes such tours to hishome state, although a staff member of another congressman came along on this year’s tour. Pam Harkey, a staffer for Congressman Ernest Istook of Oklahoma, said a small tour was conducted in her state in June. Now, she said, she is traveling with Grassley for ideas to expand her state’s own tours.

“Our agriculture is very different,” Harkey said. “We have wheat, cattle, oil and gas. Any program that brings such a diverse group to our country is good for us all.”

Grassley said his tours sprang from the 1980s farm crisis. Fostering good relations with new and existing trading partners is an integral part of Grassley’s work as chairman of the Senate Finance Committee, which oversees trade issues.

The tours are completely funded by private, individual and corporate sponsors.

In addition to the family farm, Grassley’s tour took the ambassadors to the John Deere plant in Waterloo, the University of Northern Iowa in Cedar Falls, the Amana Colonies and the Iowa State Fair, among many other sites.

Grassley took a few minutes to answer questions and said he was concerned about the potential buyout of Maytag.

“Whoever buys it, I’ll do my darndest to make sure jobs stay in Newton,” Grassley said. “And I’ve communicated that to the two potential buyers, Whirlpool and Ripplewood.”

Grassley said he has also spoken with Newton management of Maytag and he said he felt everyone involved was committed to maintaining the reputation of the company.

Maytag postpones shareholder bid meeting again

August 18, 2005
Maytag postpones shareholder bid meeting again
 
Date August 18, 2005
Section(s) Local News
Brief  
 
By PETER HUSSMANN

Editor

Maytag Corp. announced on Wednesday that it was again postponing its special meeting of shareholders to vote on Ripplewood’s $14 buyout bid.

In a filing with the Securities and Exchange Commission, Maytag said it was moving the meeting from Aug. 30 to Sept. 9 to give it more time to file and distribute updated proxy materials.

Last Friday, Maytag said Whirlpool’s $1.7 billion, or $21 a share, cash and stock offer was superior to the private equity consortium’s $1.1 billion bid. Both companies had also agreed to pick up nearly $1 billion in Maytag debt.

The Maytag board of directors has reversed its recommendation that shareholders should support Triton Acquisition Holding’s offer, the acquisition vehicle developed by the consortium of private equity firms led by Ripplewood Holdings.

In its SEC filing, Maytag said it notified Triton on Friday of its decision, adding that it can terminate the agreement with the private equity firm if it makes a similar determination on or after Monday, taking into account any revised offer Triton may make. Triton also has the right to terminate the agreement immediately.

Should the acquisition be terminated, by either party, Triton will be entitled to a $40 million break-up fee, which Whirlpool has agreed to reimburse Maytag for paying in the event Maytag enters into the Whirlpool merger agreement.

If the merger agreement between Maytag and Triton is cancelled, the postponed special meeting will be cancelled.

In separate news on Wednesday, an investment firm that opposed Maytag‘s merger agreement with Triton announced it has lowered its stake in the Newton-based home appliance manufacturer.

Brandeis Investments Partners L.P. of San Diego said in a SEC filing that it now owns 6.35 million Maytag shares, a 7.96 percent stake in the company.

In May, when the firm announced that it planned to vote against the Maytag-Triton merger because the $14 per share offer did not represent a fair value for the company, Brandeis said it owned 8.4 million shares, a 10.5 percent stake in the company.

Whirlpool’s purchase motives questioned

August 17, 2005
Whirlpool’s purchase motives questioned
 
Date August 17, 2005
Section(s) Local News
Brief  
 
By DAVID PITT

AP Business Writer

Skepticism is growing about whether appliance giant Whirlpool Corp. is serious about buying rival Maytag Corp. or is just looking to weaken a competitor by dragging it through a lengthy antitrust process.

“There’s something odd about this purchase,” said Steve Sleigh, spokesman for the International Association of Machinists, which represents Maytag workers in Iowa and Illinois and Whirlpool workers in Michigan.

“What I don’t want is this situation to be in limbo for an extended period of time, weaken Maytag to the point that Whirlpool pulls out because they have the option to do so and leaves Maytag not as strong as it could be,” Gov. Tom Vilsack said.

Questions from analysts, labor and government officials center on why Whirlpool continues to offer assurances that the deal would win regulatory approval when antitrust concerns seem obvious.

Whirlpool has offered $1.79 billion, or $21 a share. Including the assumption of $977 million of Maytag debt, the entire deal is valued at about $2.7 billion.

Industry analysts said most troubling is whether regulators would allow two of the three largest appliance manufacturers to merge. A combined Whirlpool-Maytag corporation would make it the largest appliance manufacturer in the world.

Analyst Nicholas Heymann of Prudential Equity Group estimates that a combined company would hold 81 percent of the U.S. market in gas clothes dryers and 74 percent of the market in electric dryers.

About 72 percent of washing machines and half the dishwashers bought in the United States would be made by Whirlpool or Maytag.

Overall, Whirlpool would have about 48 percent of the market share in major appliances, far ahead of General Electric, which has about 26 percent and Electrolux, with about 20 percent.

“With combined U.S. laundry market shares over 70 percent … antitrust issues could be a problem,” Heymann said in a recent report to investors.

Whirlpool executives have said they are so confident of approval, they will pay Maytag $120 million if regulators block the deal.

Whirlpool’s market is global, not U.S.-centered, and there is growing competition from South Korean companies LG and Samsung and China’s Heier, Whirlpool spokesman Steve Duthie said.

Steve Axinn of Axinn, Veltrop & Harkrider, a New York law firm with extensive antitrust experience, said a regulatory review of the deal could take as long as nine months and is as likely to fail as it is to succeed.

“I think this case is as close to a toss-up as I have ever seen,” Axinn said.

However, another industry analyst says anti-trust concerns should not be an issue for the merger to be completed.

David MacGregor of Longbow Research in Independence, Ohio, says the support Whirlpool has received from its top 20 trade customers and buying groups, including the top four retailers and top three buying groups which account for 90 percent of retail appliance sales makes a Justice Department block unlikely.

If the deal fails to pass muster, Whirlpool could simply pay Maytag the $120 million breakup fee and walk away.

The merger plan calls for the acquisition to be completed by Dec. 31, 2006.

Maytag also has an interest in seeing the agreement through. The merger plan requires Maytag to pay Whirlpool $60 million if it breaks its agreement to be acquired by Whirlpool. In addition, Maytag would be required to repay the $40 million break-up fee Whirlpool is willing to pay to Triton Acquisition Holding Co., the equity investment consortium led by Ripplewood Holdings.

Whirlpool still would benefit because Maytag likely would emerge as a much weaker competitor, Axinn said. Maytag could lose employees and customers such as Lowe’s and Home Depot during the lengthy review process.

Axinn believes, though, that Whirlpool’s intentions are sincere.

“I think they really want to own the company. I think they’ll put up a real hard fight for it,” Axinn said.

Even if Whirlpool does succeed, union officials are skeptical about the company’s plans for its former rival.

“We don’t know what Whirlpool’s intentions are,” said Sleigh of the Machinists. “We suspect they will move a great deal of production to facilities they have in Mexico and China. We have not received any assurances from Whirlpool that they wouldn’t do that.”

A loss of jobs is Vilsack’s concern as well.

“My hope would be that whatever happens gets done in a relatively quick period of time and done in a way that maximizes the opportunity for the continuation of the workforce at Newton …” the governor said.

Meanwhile, the other company interested in buying Maytag, Triton Acquisition Holding Co., has until Sunday to respond with an increased offer. Triton initially bid $14 a share, or $1.13 billion. Friday’s shareholder vote on the Triton offer was postponed until Aug. 30 after Maytag‘s board accepted Whirlpool’s $21 bid late last week.

Also on Tuesday, Moody’s Investors Service placed the ratings of Whirlpool under review for possible downgrade and revised its rating review of Maytag to direction uncertain.

Moody’s said its reviews would focus on the structure of the financing package involved in Whirlpool’s $2.7 billion bid for Maytag.

Newton Daily News Editor Peter Hussmann contributed to this story.

Maytag board recommends higher Whirlpool bid

August 15, 2005
Maytag board recommends higher Whirlpool bid
 
Date August 15, 2005
Section(s) Local News
Brief  
 
By DAVID PITT

AP Business Writer

Maytag Corp. agreed Friday to a half cash, half stock buyout from rival Whirlpool Corp., reversing an earlier recommendation to shareholders to accept a New York investment group’s all-cash deal.

Whirlpool, the nation’s leading appliance maker, increased its offer on Wednesday for the third time, proposing to buy Maytag for $1.79 billion, or $21 a share.

Including the assumption of $977 million of Maytag debt, the entire deal was valued at $2.7 billion.

It was a $1-per-share premium to the sweetened bid of $1.62 billion that Whirlpool had offered Monday.

Whirlpool’s deal is 50 percent cash and 50 percent Whirlpool stock. It also includes a $120 million “reverse breakup” fee, which would be paid to Maytag if regulators do not approve the combination.

Whirlpool’s offer represents a 50 percent premium to the initial bid of $14 per share, or about $1.13 billion, that Maytag received from investment group Triton Acquisition Holding Co. Maytag‘s board accepted the all-cash offer on May 19 and had recommended to shareholders approval of that deal at an Aug. 19 meeting.

On Friday, Maytag withdrew its recommendation of the Triton deal and postponed the shareholders meeting to Aug. 30.

If the merger agreement between Maytag and Triton is ended, the postponed special meeting will be canceled.

Maytag said that its board has determined that … it would be inconsistent with the Maytag board’s exercise of its fiduciary duty for the board to fail to withdraw its recommendation of the Triton $14 deal. The Maytag board now recommends a vote against the Triton deal,” the company said in a statement.

Benton Harbor, Mich.-based Whirlpool has also agreed to pay the $40 million Maytag would be required to pay the Triton group to walk away from that deal.

“We welcome the determination by the Maytag board of directors that ours is a superior proposal and look forward to the signing of a definitive agreement with Maytag,” said Jeff M. Fettig, Whirlpool’s CEO.

While the news of Maytag‘s support of a Whirlpool takeover left Newton residents wondering about the future of operations locally, the news was viewed in a more positive light in Michigan.

“The proposed purchase is a bright spot in an otherwise dark Michigan economy, which has lost thousands of manufacturing jobs,” the Detroit Free Press wrote in its account of the announcement.

“The deal should keep thousands of jobs in Michigan, as well as solidify Whirlpool’ls global presence by giving it brands such as Amana refrigerators, Jenn-Air stoves and the Maytag repairman advertising campaign.

“It’s unknown if any jobs would move to Michigan.

“‘We don’t think it will have any impact on our members in Michigan,” said Stephen Sleigh, director of resources for the International Association of Machinists and Aerospace Workers, which represents more than 200 Whirlpool employees in Benton Harbor.

“What we think this will mean for Maytag is that they will basically take the Maytag production and move it to Mexico and China.”

Whirlpool employs about 3,200 people at its Benton Harbor headquarters, including 250 at its manufacturing plant there.

Brokerage firm Morgan Keegan said today that Whirlpool’s proposed acquisition of rival Maytag could likely be completed early next year, as regulatory approval could take several months, Reuters reported.

In a research note, Morgan Keegan analyst Laura Champine said it would likely be the first quarter of 2006 before a Maytag-Whirlpool deal could be completed, given the sequence of events that could take place and likely timing of a shareholder vote.

“We believe regulatory clearance may take several months,” Champine said.

Ripplewood has five days to raise its offer or terminate its pact with Maytag. If Ripplewood makes a counter proposal, Maytag would then weigh whether it is better than the bid by Whirlpool, which has raised its offer three times since initially bidding $17 a share in mid-July.

A combination of Maytag, which makes Hoover vacuums and Jenn-Air and Amana appliances, and Whirlpool, whose brands include KitchenAid and Roper, would create the world’s biggest appliance maker.

Lowe’s, the second-largest U.S. retailer of appliances behind Sears Holdings Corp., said today it would be pleased to see a combination of U.S. appliance makers Whirlpool and Maytag, Reuters reported.

“We certainly think Whirlpool could probably bring some things to assist Maytag with their continued investment in the brand,” said Lowe’s Chairman Robert Niblock during an earnings conference call. “We would be pleased to see the merger.”

Lowe’s sells both Maytag and Whirlpool products.

Maryland-based Institutional Shareholder Services, a shareholder advisory service, concluded in an analysis released Friday that the Whirlpool offer benefits shareholders more.

Assuming a 50 percent chance of the Whirlpool deal getting regulatory approval and figuring in the reverse break up fee and other factors, ISS said Maytag shareholders get a better deal with Whirlpool.

“On that basis, we concluded that the nominal $7 spread when risk-adjusted more than compensates Maytag shareholders for the assumption of risk,” the analysis said.

ISS Merger and Acquisition Director Chris Young said any increased offer from Triton would result in a reevaluation of its recommendation.

“We would revisit all aspects of the deal including the provisions of the respective contracts,” he said.

Triton was not immediately available to comment.

Federal government regulators may have a concern that the top appliance manufacturer merging with the number three company may consolidate too much market share in one company, industry analysts have said.

Newton Daily News Editor Peter Hussmann contributed to this report.

Change — Healthy and inevitable

August 12, 2005
Change — Healthy and inevitable
 
Date August 12, 2005
Section(s) Columnists
By Sen. Dennis Black  
 
More uncertainty; more anxious moments; more apprehension on what the future holds. At least our local media is focusing major time and effort in keeping the community informed on what can be learned regarding Maytag‘s future. Unlike many media outlets across the state that wait for a story to fall in their lap, ours are doing what they’re supposed to — seeking the story by interviews and making the phone calls to those “in the know.”

Rumors were flying Wednesday morning following the suspension of trading in Maytag and Whirlpool stocks. Every imaginable scenario was there to appease the feeding frenzy. I received a call from a Des Moines television station seeking my comment! Like I would know what caused Wall Street to apply the brakes? Unbelievable! Apparently I wasn’t very helpful, because the evening news never even mentioned the story, let alone my comment of, “I wouldn’t have the faintest idea!”

OUR LOCAL MEDIA is to be commended for their daily reporting of the “see-saw” of events surrounding the pending proposals to acquire Maytag. It appears that a new proposal is on the table each week, and with that comes a different set of prognostications from the market analysts. Personally, I have a bad attitude about those folks, for literally, you can shop around for a report that fits your desire for the outcome of the situation. Really — check them out on your own, and you will find the market guru’s suggesting everything from “it’s the greatest opportunity for the company, workers and community” to “kaput!”

The only sure thing is that there will be change. At this point, no one should assume these changes will be disadvantageous to the community, and conversely, no one should assume them to be positive. The truth is, frankly, no one knows. Whatever will be, will be! Then, we make the best of it, because Newton is evolving. If Maytag “stays,” Newton and its citizens will rise to the occasion, and our community will improve and become more productive and prosper. Should there be adverse changes, the leadership and citizens of the community will respond with their ingenuity and resolve to protect the economy and quality in a way different from the past. This is normal. Think about it! What in your life is static? Everything is dynamic – change is natural, inevitable and healthy. With globalization, we have to expect change, and likewise, direct that change to a positive result.

Thirty years ago I wouldn’t have believed there would be an Intermodal on the railroad line east of Newton. In fact, I questioned if there would even be a railroad, because the rumors of the demise of the Rock Island RR were everywhere. Thanks to local efforts, including Maytag, Rollscreen and shippers across the state, a plan was forged with the State of Iowa and the rail line was saved. Iowa Interstate RR now runs a viable, profitable business.

The Intermodal facility on that rail line east of Newton is underused and would be a tremendous asset to new business and industry in central Iowa. The value to Newton and Jasper County of the Intermodal should not be underestimated. I trust our county is striving to utilize the facility to capacity.

THE EAST I-80 interchange of Newton will soon experience some dramatic changes. An infusion of state road funds to enhance the exit/entrance ramps and access roads will be distributed for serving not only the MotorSports Complex, but also necessary infrastructure that will draw substantial outside business investment in service related structures, i.e. motels, restaurants, gas stations, shopping opportunities, Interstate cold-storage, etc. Capturing additional interstate traffic will occur with these improvements. Build it, and they will come!

And, we know that ethanol and bio-diesel fuel production is in our near future. Everyone can well rest assured that expansion of alternative fuel production and energy sources in Iowa is no longer a dream but rather a reality. The glut for fuels for combustion engines will only grow, and Iowa is the primary source of the biomass. We can produce corn, soybeans and other mass for fuel production; we can’t produce more fossil fuels.

Diversity is the most dependable means for maintaining any local economy, with a combination of tourism, goods-production and service related business and industry to provide local job stability and area economic viability and vitality. If need be, Newton and Jasper County will adjust to change. We’re perfectly positioned in the center of the state, and will need to take greater advantage of our known assets — work ethic, transportation corridors, low crime rate, affordable housing and friendly people. What more could they ask for?

Source: Maytag ready to back Whirlpool offer

August 12, 2005
Source: Maytag ready to back Whirlpool offer
 
Date August 12, 2005
Section(s) Local News
   
 
Reports out of New York today indicate the Maytag board of directors is set to formally give its backing to Whirlpool’s $1.7 billion buyout offer unless the private equity group currently bidding $1.13 billion responds with a counter proposal.

Reuters, citing “a source close to the deal,” said that the Maytag board is ready to announce that the Whirlpool offer of $21 a share plus the assumption of nearly $1 billion in Maytag debt is substantially superior to the Triton Acquisition group’s $14 a share deal. The news agency said Triton, which is led by private equity firm Ripplewood Holdings, has until 2 p.m. today to increase its bid.

Whirlpool has made four bids for Maytag since the Chinese-government backed Haier America group announced it would offer $16 a share. Whirlpool, in a move described by analysts as a defensive effort to avert Chinese entry into the North American home appliance manufacturing industry, initially countered with a $17 price before raising it to $18, then $20 and $21 on Wednesday. The Maytag board of directors approved the Triton merger deal on May 19.

Whirlpool’s offer to buy rival Maytag received the backing of an influential proxy firm on Thursday when it said shareholders should reject the Triton offer in favor of Whirlpool’s.

Institutional Shareholders Services of Rockville, Md., said Maytag shareholders should vote against the planned buyout by Triton scheduled for a vote a week from today in Newton in light of Whirlpool’s higher offer.

ISS noted that Maytag shareholders face a “difficult choice” due to the anti-trust concerns stemming from a Maytag-Whirlpool merger. Federal review of the impacts of such a buyout could take months. Whirlpool has agreed to pay Maytag $120 million should federal regulators block the deal, as well as paying the $40 million Triton is entitled to should the current deal not go forward.

“We believe that the currant level of uncertainty of the board’s posture toward the Whirlpool bid provides an additional basis for shareholders to refrain from voting in favor of the Ripplewood offer at this point in time,” ISS said in a statement.

Should Ripplewood up its ante, ISS said it would re-analyze the proposals.