Whirlpool Corp., one of the nation’s largest appliance makers, made it a three-way race by offering to buy competitor Maytag Corp. for $1.37 billion in cash and stock, topping an earlier offer that Maytag accepted from an investment group.
Whirlpool said late Sunday that its offer of $17 per share for Newton, Iowa-based Maytag represents a 21 percent premium over the offer from Triton Acquisition Holding Co. Whirlpool would assume Maytag’s debt of $969 million.
Maytag released a statement early Monday saying its directors would consider the new bid from Whirlpool but had not changed their recommendation for the other deal.
On May 19, Maytag agreed to be acquired by Triton, an entity organized by the New York investment company Ripplewood Holdings LLC, for $14 a share, in a deal valued at about $1.13 billion.
But on June 20, Maytag said it was considering a preliminary $1.28 billion bid from Bain Capital, Blackstone Group and China’s Haier America that valued Maytag at $16 per share.
Benton Harbor-based Whirlpool planned a conference call Monday morning to discuss the proposal with financial analysts.
“I think that this could be an enormously positive deal for both parties, but particularly for Whirlpool,” Laura Champine, an industry analyst with Memphis, Tenn.-based Morgan Keegan & Co., said before the Monday conference call.
Rising costs of steel, oil and other raw materials have reduced Whirlpool’s share value by more than half, Champine said. Joining with Maytag would allow Whirlpool to not only get better prices for raw materials but also to combine research and development resources, she said.
The Triton offer remains viable, Champine said, adding, “We could still see offers increased by any or all of these three players, and of course this opens the field for another player (to bid for Maytag).”
But, she said, “If there’s a definitive agreement from Whirlpool at $17 before the (Maytag) shareholders’ meeting, and if the regulators approve it, I think they’ll recommend the Whirlpool deal.”
Whirlpool said its proposal is subject to investigations and a negotiated merger deal.
“This transaction will provide Maytag shareholders with superior value compared to the current offer,” Jeff M. Fettig, Whirlpool’s chairman, president and chief executive, said 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.”
Whirlpool on Sunday also reaffirmed its earnings outlook for 2005, saying it continues to expect full-year earnings per share of $5.90 to $6.10.
Whirlpool is a leading maker and seller of major home appliances, with annual sales of about $13 billion, 68,000 employees and about 50 factories and research centers worldwide.
The company sells Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other major brand names in more than 170 countries.
Maytag’s brands include Maytag, Amana, Hoover, Jenn-Air and Magic Chef.