Roper Urges Its Holders to Sell to GE, Not Whirlpool

Roper Corp.’s directors changed sides Tuesday in the takeover fight for the appliance manufacturer, saying stockholders should sell to General Electric Co. instead of Whirlpool Corp.

Roper’s board determined that GE’s $508-million tender offer was clearly superior to Whirlpool’s $470-million bid, the company said in withdrawing a recommendation of Whirlpool made March 18.

“Discussions with Whirlpool . . . have not to date led Whirlpool to propose an increase in the price offered for Roper shares,” Roper’s statement said.

The battle began in February, when Roper announced that it had agreed to be acquired by Whirlpool for $37.50 for each of Roper’s 9.4 million shares outstanding, or about $352.5 million. General Electric then entered the fray with a bid of $45 per share, or $423 million.

Both companies have since increased their bids, with GE’s currently at $54 per share and Whirlpool’s at $50.

Whirlpool and GE have filed federal court suits challenging each other’s actions, with GE claiming that the Roper board failed to tell stockholders of an earlier interest in the company and Whirlpool complaining that GE was trying to sabotage an already announced deal. Hearings are scheduled this week in Whirlpool’s suit.

The board said Roper stockholders should withdraw their shares already offered to Whirlpool and tender them to GE instead.

Whirlpool, in a statement issued from its Benton Harbor, Mich., headquarters, said the company will continue to pursue Roper.

“Our definitive merger agreement with Roper still stands,” David R. Whitwam, Whirlpool’s president, chairman and chief executive, said in the statement. “The Roper board’s action is disappointing in light of its corporate charter to consider the best interests of all constituents. . . . However, it is understandable in view of the current price differential and the pressures being applied by GE.”

Roper employs about 4,750 people, 3,000 of them in four Georgia plants. In addition to electric and gas appliances, the company manufactures tillers, lawn mowers and lawn and garden tractors. Its customers include Sears, Roebuck & Co., the nation’s largest retailer.

It also manufactures some GE ranges, and the Fairfield, Conn.-based company has said its interest in Roper stems from that association.

Roper had net income of $24 million on $703 million in sales for the fiscal year ended July 31.

GE, which also has financial and broadcasting interests, had 1987 revenue of $40.5 billion and net income of $2.9 billion. Its major appliance business was responsible for $4.72 billion in revenue and a pretax operating profit of $490 million.

Whirlpool had $4.2 billion in sales last year.