White Accepts $742-Million Electrolux Merger
The board of directors of White Consolidated Industries on Monday accepted the second takeover offer in a week by Sweden’s AB Electrolux, which raised its bid to $742 million from $711 million.
A statement released by the company said the board would unanimously recommend to its shareholders that they accept the $47-a-share offer by Electrolux, Europe’s leading appliance maker, for all of White’s common stock.
There are 15.8 million shares outstanding.
“It is also anticipated that a definitive merger agreement will be entered into as promptly as possible,” the statement said.
Shareholders who do not tender their stock as a result of the offer will nevertheless receive $47 in cash in connection with the merger, the statement said. In addition, White Consolidated authorized the grant to Electrolux of an option to acquire from the company up to 18.5% of the outstanding common shares at $47 a share.
Under the agreement, White will become a wholly owned subsidiary of AB Electrolux, and White Chief Executive Ward Smith will be chairman. Company headquarters will remain in Cleveland.
Neither Ronald G. Fountain, the White Consolidated vice president who has been answering media queries, nor Smith could be reached immediately for comment.
After the original offer, White’s common stock traded above $48 a share, reflecting investor speculation that a higher bid from Electrolux or a third party might be forthcoming. But the later Electrolux-White announcement appeared to dampen expectations for an extended bidding war, and White’s stock fell $1.50 a share to close at $46.875 on Monday in New York Stock Exchange trading.
Electrolux is Europe’s leading appliance maker whose products include Tappan ranges and Eureka vacuum cleaners. Cleveland-based White Consolidated is the third-largest U.S. appliance manufacturer whose brands include Frigidaire and Kelvinator.
After Electrolux launched its initial $45-a-share offer last week, White asked a federal judge in Cleveland to issue a temporary restraining order that would have blocked the bid. The judge refused but set a hearing for March 17 on White’s request for a preliminary injunction. White subsequently filed a second lawsuit charging that the proposed merger would violate U.S. antitrust laws.
Meanwhile, Electrolux said it reached an agreement with Emerson Quiet Cool Corp., a maker of air conditioners and humidifiers, that voids a 1983 agreement under which Electrolux had promised not to compete with Emerson before Sept. 30, 1988.
White Consolidated makes air conditioners and humidifiers, and Electrolux had planned to divest that business after it bought White in order to honor its previous agreement with Emerson.
But Electrolux said that, because of its new agreement with Emerson, the proposed divestiture “will no longer be necessary” if Electrolux succeeds in acquiring White.
