Maytag Warms to Whirlpool

A sweetened offer moves the sides toward talks.
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The struggling Newton, Iowa, washer-dryer maker said Sunday that a sweetened $1.4 billion bid from its Benton Harbor, Mich., rival was financially superior to its existing $1.13 billion deal with private equity buyer Ripplewood Holdings, and capable of being closed. That legalistic-sounding determination could open the door to talks between the big appliance makers.

Maytag's comments came two days after Whirlpool increased its offer for the company by a dollar a share to $18. Maytag had rejected Whirlpool's initial proposal, made last Sunday, as not reasonably expected to be financially superior or reasonably capable of being completed. Maytag's turnabout came after Whirlpool upped its bid late Friday night and gave Maytag just two days to respond or risk having the bid yanked off the table.

Whirlpool's amended bid highlighted the company's contention that a Maytag merger wouldn't face antitrust hurdles with regulators. Maytag noted that comment in its own release and indicated that Ripplewood has threatened to walk away from its merger agreement, which carries a $40 million breakup fee, should Maytag talk with Whirlpool or open its books for due diligence. Maytag said it doesn't believe Ripplewood has that right under the circumstances.

Maytag's board maintained its recommendation in favor of the Ripplewood merger, however, pending Whirlpool's assurances on "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."

Early Monday, Maytag was at $16.20 and Whirlpool was at $77.18.