M&A

Three’s Company for Maytag

Appliance maker's board will consider an offer from Whirlpool but has not changed its recommendation of an agreed-upon deal.
Stephen TaubJuly 18, 2005

The Maytag repairman may still be lonely, but its executive team certainly is not.

Whirlpool Corp. has made a $2.3 billion offer for the appliance maker, joining private-equity firm Ripplewood Holdings LLC and Chinese appliance maker Haier Group as a Maytag suitor.

Whirlpool’s offer, for $17 per share, is a combination of cash and stock and includes assumed debt of $969 million. Haier Group has reportedly offered $16 per share, although Reuters stresses it has not made a formal bid. Maytag had already agreed to be acquired by a group led by Ripplewood for $1.125 billion, or $14 per share, when Haier and then Whirlpool expressed interest.

“This transaction will provide Maytag shareholders with superior value compared to the current offer,” said Jeff M. Fettig, Whirlpool’s chairman, president, and chief executive officer, in a statement. “Equally important, the combination fits Whirlpool’s strategy and capabilities, will create strong value for our shareholders and provide direct benefits to consumers and trade customers.”

In a press release, Maytag stated that its board of directors would consider the new proposal but has not changed its recommendation of the Ripplewood-led deal. That transaction is scheduled for a shareholder vote on August 19.

Whirlpool could have an edge over Ripplewood, pointed out Reuters, since the appliance maker has an existing relationship with unions that work with Maytag.

The wire service observed that Whirlpool’s offer could be a defensive maneuver designed to prevent another strong international competitor, Haier, from gaining control of Maytag. However, a Whirlpool-Maytag deal could face significant antitrust barriers in the United States, according to Reuters, which cited Prudential analyst Nicholas Heymann.