Source: Maytag ready to back Whirlpool offer

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.


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