Whirlpool has made a $17 per share offer to buy Maytag, who said it would consider the proposal, but the company’s board of directors is currently in favor of Maytag’s current deal with Ripplewood.
Whirlpool is the third party to make an offer to purchase Maytag. Aside from Ripplewood, China’s Haier Group has held discussions with the company.
“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,” continued Fettig.
Earlier this year, Best Buy stopped selling Maytag’s washing machines and refrigerators, and this hurt the company’s profits significantly. Profits from the company’s Hoover unit have also fallen. MarketWatch reports:
It’s a chance for Whirlpool to take over a competitor with a sagging market value while retaining a well-known brand name and reaping bottom-line benefits as soon as next year, observers said. Whirlpool, despite the high cost of restructuring that would surely follow, could also flow some of its manufacturing needs into Maytag’s excess capacity.
Maytag, the Newton, Iowa-maker of refrigerators, dishwashers, washing machines and ovens, has in hand a firm $14-a-share bid from Ripplewood Holdings.
Whirlpool expects its full-year 2005 earnings per share to be between $5.90 and $6.10. The company also expects cash provided by operating activities to be about $860 million, and free cash flow to be in the $250 to $300 million range.
Maytag shares went up 8.7% in premarket trading today, reaching $16.80 on the Inet electronic brokerage system according to Reuters.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
