Appliance maker Whirlpool Corporation has increased the value of its proposal to acquire Maytag to U.S. $18 per Maytag share from $17 per share.
"By delaying a prompt response and failing to recognize the clearly superior value of our July 17 proposal, the Maytag board of directors has jeopardized this important opportunity for consumers, trade customers, and shareholders of both Maytag and Whirlpool," said Jeff M. Fettig, Whirlpool's chairman, president, and CEO. "This amended proposal includes additional terms that we believe should fully address any concerns of the Maytag directors."
The amended proposal of $18 per Maytag share is a 29-percent premium to Maytag shareholders compared to the Triton offer.
"This proposal is the best solution with clearly superior value compared to the Triton offer. I expect the Maytag board of directors to do what's best for Maytag shareholders and immediately and fully support this proposal," Mr. Fettig said.
In response, Maytag said that its board of directors has determined that Whirlpool's revised proposal may reasonably be expected to lead to a transaction that is financially superior to Maytag's pending transaction with the Ripplewood-led Triton Acquisition group and that is reasonably capable of being completed. Under Maytag's existing merger agreement with Triton Acquisition, this determination is a prerequisite for Maytag to furnish information to, and have discussions and negotiations with, Whirlpool.
Maytag stated that, in reaching its determination, the board took into account Whirlpool's representation as to a complete lack of opposition to the transaction from the top 20 trade customers and buying groups, including the top four retailers and top three buying groups that represent 90 percent of retail appliance sales.
Maytag said that it expects that the terms of a definitive agreement, if any, with Whirlpool will take into account the risks to Maytag of non-consummation, Whirlpool's assertion that the antitrust clearance process can be completed by the end of 2005, and Whirlpool's overwhelming confidence that there is no antitrust problem in a Maytag/Whirlpool combination.
Maytag also reported that following the making by Whirlpool of its earlier proposal, Triton informed Maytag that, in Triton's view, the transaction proposed by Whirlpool did not satisfy the prerequisites for Maytag's board making the determination required under the merger agreement. Triton has also advised Maytag that discussions, negotiations, and/or due diligence by Maytag with Whirlpool will give Triton the right to terminate the existing merger agreement. Maytag believes that its actions are in accord with the merger agreement and do not give Triton any termination rights.
Maytag also said that its board of directors has not changed its recommendation of the existing Maytag/Triton transaction. Notwithstanding the determination that the Whirlpool proposal may reasonably be capable of being completed, Maytag said that the Whirlpool proposal is 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.
Maytag noted that before it would be willing to share competitively sensitive information, it would require greater certainty with respect to these and other issues. In contrast, the Triton transaction is expected to close within a month and, subject to shareholder approval and completion of financing, has already satisfied the major conditions to closing.
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