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Whirlpool hikes Maytag bid to $2.7 billion

Whirlpool Corp. Wednesday raised its takeover offer for Maytag Corp.  a third time, to $21 a share, moving to derail its smaller rival’s $14-a-share buyout by a private equity firm.
/ Source: Reuters

Appliance maker Whirlpool Corp. Wednesday raised its takeover offer for Maytag Corp.  a third time, to $21 a share, moving to derail its smaller rival’s $14-a-share buyout by a private equity firm.

The sweetened offer, which the company valued at $2.7 billion, including the assumption of $977 million in debt, followed Whirlpool’s Monday bid of $20 a share, or $1.6 billion, which was $2 higher than its previous offer.

Maytag’s stock gained more than 3 percent on news of Whirlpool’s latest bid.

Ripplewood Holdings, the private equity firm that submitted the $14-a-share bid for Maytag in May, declined to comment. The New York firm, however, is likely to back out of the deal, according to a person close to the matter, as Maytag has indicated it is inclined to go with Whirlpool’s bid.

Though Maytag has cited concern over regulatory scrutiny and the time it would take to complete a deal with Whirlpool, sources say the Newton, Iowa, company appears more concerned with the shareholder liability potential of refusing a higher offer than with the antitrust risks.

Some shareholders have publicly assailed the Ripplewood bid as too low for the maker of Hoover vacuums, and Maytag disclosed in a federal filing that it faced lawsuits over the Ripplewood deal’s value.

Whirlpool, based in Benton Harbor, Michigan, initially offered $17 a share, or $1.3 billion, in July. It raised the price to $18 a share, or $1.4 billion, after Maytag said it couldn’t determine whether the first offer was superior to a $1.1 billion cash bid from a group led by private equity firm Ripplewood Holdings.

In a statement Wednesday, Whirlpool reiterated that it would pay the $40 million fee to break up Maytag’s $14-a-share deal with Ripplewood as well as a $120 million reverse break-up fee if regulators reject a Whirlpool-Maytag combination.

Maytag has set an Aug. 19 vote on the Ripplewood bid. Several published reports on Wednesday said Ripplewood was mulling whether to raise its offer.

A combination of Whirlpool and Maytag would create the world’s largest appliance maker and marry Maytag’s Jenn-Air, Magic Chef and Amana brands with Whirlpool’s KitchenAid and Consul products.

Whirlpool was the third company to show interest in Maytag, which in June received an informal offer from a group including Chinese appliance maker Haier for $16 a share. Haier withdrew its bid days after Whirlpool made its offer.

Maytag’s profitability has declined in recent years amid a slump at the Hoover vacuum division, higher raw materials prices and increased competition from foreign rivals with lower fixed costs.