GE Launches $423-Million Bid for Roper : Whirlpool’s Offer Had Been Accepted
General Electric on Monday announced a $423-million cash tender offer for all outstanding shares of Roper Corp., which last month signed a merger agreement with Whirlpool Corp., a GE competitor in the major appliance field.
The GE offer is $45 a share, or $423 million, for Roper’s 9.4 million common shares outstanding. GE topped Whirlpool’s bid of $37.50 a share, or $352.5 million.
Analysts applauded GE’s attempt to one-up a competitor in the major appliance field.
“It makes sense and the numbers look real good,” said Nicholas Heymann, a vice president of Drexel Burnham Lambert in New York. “In terms of what they’re getting, they’re trying to make a statement with the price.”
The offer marks the first time that GE, a major manufacturer with interests in finance and broadcasting, has made an unsolicited offer for a company.
May Go Higher
In consolidated New York Stock Exchange trading, Roper’s stock soared $11 a share to $48.375 a share, above GE’s offer, indicating that speculators expected a higher offer to emerge.
GE fell 75 cents a share to $43.375 and Whirlpool dropped 62.5 cents a share to $28.75.
Roper’s products include gas and electric ranges, and it makes some of GE’s ranges.
Heymann said GE has carved out a niche in the gas range market within the past three years, and is No. 3 in that business with 15% of the market.
Russ Leavitt, senior analyst for Salomon Bros. in New York, said the merger attempt gives GE a “potentially strengthened position in the cooking business.”
“It also gives them an entree to Sears, which is a major appliance retailer where GE has not been involved,” Leavitt said, referring to Sears, Roebuck & Co. “Roper is a Sears supplier of cooking products and in the past GE has sold very little to Sears. It could help them get into that market.”
GE said it made the offer after learning from a Securities and Exchange Commission filing that Roper agreed to the Whirlpool merger under threat of a “unilateral takeover.”
GE said that it had discussions with Roper management last year, when Roper officials said they wanted the company to remain independent.
“Obviously, circumstances have changed,” GE said in a statement released from its Fairfield headquarters.
