Triton Acquisition Holding, the investor group which first offered to buy Maytag in May for $1.12 billion plus assumed debt, is crying foul over Maytag's cooperation with a second acquisition group that includes Chinese white- and brown-goods importer Haier America Trading.
The second bidders trumped Triton's $14 a share offer last month with a $16 a share proposal that's worth $1.28 billion.
Triton, led by Ripplewood Holdings LLC, had received the blessing of Maytag's board, and the buyout was essentially considered a done deal pending a vote by shareholders. Although the board continues to favor a Triton buyout, it said it is obligated to pursue further due diligence with Haier and its backers, Bain Capital Partners LLC and Blackstone Capital Partners IV L.
“We continue to support the Ripplewood transaction,” said Howard Clark, Maytag's lead director. “However, we also believe that it is incumbent on us to pursue this possibility of achieving a higher price for our stockholders.”
Last month Triton advised Maytag orally that continuing to furnish information to, and hold discussions with, Haier after June 18 gives it the right to terminate their merger agreement and collect a $40 million termination fee. Triton added that Maytag's discussions with the Haier group are causing “disruption and uncertainty” that is damaging to both Triton and Maytag.
Triton further compelled Maytag to “accelerate the process” and bring it to a “rapid conclusion.”
Maytag's board said it disagrees with Triton's interpretation of the merger agreement, and intends to pursue its process with the Haier group “as expeditiously as practicable,” and consistent with it fiduciary duties.
Haier America is jointly owned by Haier Group, China's largest majap company, and a U.S.-based marketing organization led by president/CEO Michael Jemal. Among the majaps produced by Maytag and Haier are refrigerators, laundry, dishwashers and cooking products. Analysts believe Haier would use Maytag's stable of prized majap brands, including Maytag, Amana and Jenn-Air, to accelerate its penetration into the U.S. market, particularly within the lucrative premium strata.
Maytag said completion of due diligence is expected to take six to eight weeks, with the proposal contemplating debt financing provided by Merrill Lynch & Co. on terms and conditions to be agreed upon with the investors.
The board added that there is no assurance that the preliminary non-binding proposal from Haier and its partners would result in a definitive agreement.
The second purchase offer for Maytag, a $4.7 billion majap company focused in North America and in targeted international markets, comes at a time this white-goods producer has fallen on hard times, due principally to its over-concentration of production in the United States. The result has been tumbling sales and earnings, due, in part, to Maytag being faced with greater competition from lower-cost offshore producers, including a wave of Asian majap makers such as Haier.