Maytag shares tumble on report merger in trouble

Maytag shares tumble on report merger in trouble
 
Date January 11, 2006
Section(s) Local News
Brief  
 
By PETER HUSSMANN

Editor

Shares of Maytag and Whirlpool were rebounding this morning after they fell sharply on Tuesday on a report that the U.S. Justice Department may not approve the merger deal.

The Deal.com reported on Tuesday that antitrust concerns might lead the Justice Department to block Whirlpool’s plan to buy Maytag for $1.7 billion in a $21 per share cash and stock offer. Whirlpool, currently the United States’ largest seller of appliances, would become the world’s largest manufacturer with the acquisition of Maytag. The Web-based magazine did not identify its sources within the Justice Department.

Shares of Whirlpool dropped $1.89 to close at $83.10 on Tuesday following the report. The number of shares traded was up only slightly from the daily average of about 700,000 shares.

Maytag stock dipped 88 cents on Tuesday to close at $17.89. Volume was heavy, with nearly 2.6 million shares trading hands.

In early trading today, Maytag‘s stock was up 11 cents to $18 while Whirlpool’s price had jumped 28 cents to $83.38. Volume was not heavy.

Home appliance industry analysts are mixed on whether the Justice Department will lend approval to the merger. Some analysts feel the Justice Department will act in favor of the merger due to the increasing global competition in the appliance industry while others point to the dominant position the merger will put Whirlpool in the North American marketplace, where it will have as high as 70 percent of the washing machine market.

Maytag shareholders last month approved the merger at a special stockholder meeting in Newton. The companies have said the merger will close no sooner than Feb. 27, pending regulatory approval.

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