Maytag Goes for a Spin

According to recent proxy statements, Maytag's senior executives stand to reap rich rewards if they lose their jobs as a result of the company's sale. The company has said that management would largely remain in place under the deal, but if a shake-up took place down the road, current senior executives stand to receive a lump sum of two to three years of their annual base salaries and annual and long-term bonuses; a pro-rated annual bonus for the year of termination; plus other pro-rated bonuses, health insurance and retirement benefits.

Meanwhile, Ironwood Capital Management President Warren Isabelle reportedly called Ripplewood's offer "thievery" and said he would vote against it. San Diego-based Brandes Investment Partners indicated that it too would vote its 10.5% stake against the transaction. John Goetz of Pzena Investment Management LLC, which owns more than 1.1 million Maytag shares, has also reportedly expressed a lack of support for the price tag.

All this noise came as labor leaders and Iowa politicians wrung their hands about possible job losses. Shares of Maytag quickly climbed above the $14 mark as rumors of other interested buyers surfaced, and traders began to smell a bidding war.

At the forefront of the rumors stood Haier, the Chinese appliance maker that joined with another group of buyout mavens in an attempt to elbow Ripplewood out of the deal. Despite the higher bid, there is still no guarantee that shareholders will be satisfied with $16. Furthermore, a Chinese buyer could be even more distasteful on Iowa's political scene, since the implication seems to be that local jobs will wind up in Asia.

"I would guess the unions are hostile to a bid from a Chinese manufacturer," Champine says. "Regardless what happens, I think that Maytag has some high-cost U.S. plants that are going to close no matter who owns them."