updated 8/12/2005 5:44:25 PM ET 2005-08-12T21:44:25

Maytag Corp. agreed Friday to a half cash, half stock buyout from rival Whirlpool Corp., reversing an earlier recommendation to shareholders to accept a New York investment group’s all-cash deal.

Whirlpool, the nation’s leading appliance maker, increased its offer on Wednesday for the third time, proposing to buy Maytag for $1.79 billion, or $21 a share.

Including the assumption of $977 million of Maytag debt, the entire deal was valued at $2.7 billion.

It was a $1-per-share premium to the sweetened bid of $1.62 billion that Whirlpool had offered Monday.

Whirlpool’s deal is 50 percent cash and 50 percent Whirlpool stock. It also includes a $120 million “reverse breakup” fee, which would be paid to Maytag if regulators do not approve the combination.

Whirlpool’s offer represents a 50 percent premium to the initial bid of $14 per share, or about $1.13 billion, that Maytag received from investment group Triton Acquisition Holding Co. Maytag’s board accepted the all-cash offer on May 19, and had recommended to shareholders approval of that deal at an Aug. 19 meeting.

On Friday, Maytag withdrew its recommendation of the Triton deal and postponed the shareholders meeting to Aug. 30.

If the merger agreement between Maytag and Triton is ended, the postponed special meeting will be canceled.

“Maytag said that its Board has determined that...it would be inconsistent with the Maytag Board’s exercise of its fiduciary duty for the Board to fail to withdraw its recommendation of the Triton $14 deal. The Maytag Board now recommends a vote against the Triton deal,” the company said in a statement.

Benton Harbor, Mich.-based Whirlpool has also agreed to pay the $40 million Maytag would be required to pay the Triton group to walk away from that deal.

“We welcome the determination by the Maytag board of directors that ours is a superior proposal and look forward to the signing of a definitive agreement with Maytag,” said Jeff M. Fettig, Whirlpool’s CEO.

Maryland-based Institutional Shareholder Services, a shareholder advisory service, concluded in an analysis released Friday that the Whirlpool offer benefits shareholders more.

Assuming a 50 percent chance of the Whirlpool deal getting regulatory approval and figuring in the reverse break up fee and other factors, ISS said Maytag shareholders get a better deal with Whirlpool.

“On that basis, we concluded that the nominal $7 spread when risk-adjusted more than compensates Maytag shareholders for the assumption of risk,” the analysis said.

ISS Merger and Acquisition Director Chris Young said any increased offer from Triton would result in a reevaluation of its recommendation.

“We would revisit all aspects of the deal including the provisions of the respective contracts,” he said.

Triton has five business days to decide whether to increase its offer. Under its agreement, Triton can terminate its merger agreement with Maytag immediately.

Triton was not immediately available to comment.

Federal government regulators may have a concern that the top appliance manufacturer merging with the number three company may consolidate too much market share in one company, industry analysts have said.

Maytag brands include Hoover, Jenn-Air, Magic Chef and Amana. Whirlpool sells appliances under KitchenAid, Brastemp, Bauknecht, Consul and other major brand names.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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