The Blackstone Group is among the private equity firms that may be interested in launching a counter bid for appliance maker Maytag Corp., sources familiar with the matter said.
Maytag agreed to be bought last month in a deal led by private equity firm Ripplewood Holdings LLC for U.S. $14 a share, a 21-percent premium to Maytag's closing price the day of the announcement.
The Ripplewood deal comes as appliance maker struggles with higher raw material costs, shrinking market share, and competitors with lower labor costs.
One corporate buyer and two other private equity firms have also expressed interest in submitting a counter bid, said a source, who did not want to be identified.
Still, several analysts believe that the $14-a-share offer is the best price available for the struggling company, and that talk of outside bidders is mere speculation.
"With the stock trading above the offer price since day one of the deal, clearly the market is pricing in another bid," said Peter Lobravico, head of merger arbitrage trading at Wall St. Access, a New York brokerage firm. "But it's really speculation at this point. The $14 price is fair considering the company's struggles and its balance sheet concerns."
Mr. Lobravico added that while some shareholders have voiced concern about the deal, others are happy with the offer, considering that the stock was trading at around $9 before word spread that Ripplewood was interested.
Under terms of the deal, Maytag can actively solicit other bids until June 18, 2005, according to several people familiar with the terms. After that, the company can consider other offers. Ripplewood has a $40 million break-up fee if the deal falls through, according to filings.
The Blackstone Group, one of the world's largest private equity firms, is seeking to raise an $11 billion buyout fund. The fund would eclipse the record $6.5 billion Blackstone raised in 2002.
Ripplewood, Goldman Sachs Group Inc.'s GS Capital Partners, and J. Rothschild Group said they would pay $1.13 billion for Maytag and Ripplewood said it plans to bring Maytag's high cost structure under control and will have the company invest in new products. (Reuters)
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