The Whirlpool Goes Around and Around

Directors of Maytag Corp. (Newton, Iowa) have determined that the revised takeover proposal from Whirlpool Corp. (Benton Harbor, Mich.) is financially superior to Maytag’s pending transaction with a group led by Ripplewood Holdings (New York), a private equity firm. That agreement was signed earlier this summer.

But Maytag, which recently jumped into the battle for the country’s third-largest consumer appliance supplier, announced over the weekend that it had increased the value of its proposal to acquire Maytag from $17 a share to $18, a 29 percent premium over the Ripplewood offer. It also stepped up the rhetoric.

“By delaying a prompt response and failing to recognize the clearly superior value of our July 17, 2005, proposal, the Maytag board of directors has jeopardized this important opportunity for consumers, trade customers and shareholders of both Maytag and Whirlpool,” said Whirlpool president, chairman and ceo Jeff Fettig. “This amended proposal includes additional terms that we believe should fully address any concerns of the Maytag directors.”

Until Whirlpool entered the fray, the Maytag takeover attempt was a two-party affair, between Ripplewood Holdings and Haier Group Co. (Qingdao, China), a major Chinese conglomerate whose bid was being backed by The Blackstone Group (New York) and Bain Capital (Boston). Last week, Haier removed itself from the bidding.

Maytag’s directors said they have not changed their recommendation of the existing Maytag/Ripplewood transaction. The board noted that the Whirlpool proposal, while perhaps financially superior transaction, is also uncertain as to the timing of completion, the form of consideration and the valuation of any stock consideration, Whirlpool’s due diligence process, and the mechanisms referred to by Whirlpool to address regulatory and other closing risks.