Maytag Accepts Investors’ $1.1-Billion Buyout Offer
Maytag Corp., grappling with sliding market share and stunted profit, said Thursday that it had agreed to be acquired for $1.1 billion by a group of investors led by private equity firm Ripplewood Holdings.
The group of investors will pay $14 a share and assume $975 million in debt, according to Maytag, based in Newton, Iowa.
The offer represents a premium of 21% to Maytag’s closing share price of $11.56, up 9 cents, on the New York Stock Exchange on Thursday.
In addition to Ripplewood, other members of the investor group are RHJ International, GS Capital Partners and J. Rothschild Group of Cos.
The deal comes as Maytag -- an American name brand icon known for its Maytag washing machines and dryers and other household appliances such as Hoover vacuum cleaners -- struggles with higher steel prices and fierce competition from rivals.
In addition, the company has lost display space at key retailers such as Best Buy Co., which is dedicating more shelf space to products from Maytag’s Asian competitors such as LG Electronics and Samsung Electronics.
Last week, Maytag halved its quarterly dividend after posting an 80% drop in first-quarter profit in April and said it was looking to restructure its debt.
The company, whose stock has tumbled to 21-year lows since the April earnings report, expects its sale to close before the end of the year.
David MacGregor, an analyst with Longbow Research in Cleveland, said the value of Maytag’s brands was what probably attracted the investor group. But, he said, it would require more effort to turn the overall business around.
“The real value of the business is in the brands and the retailer relationships,” he said. “The company is pretty much mispositioned. If they can turn things around as a private company, the work will require long-term focus.”
Maytag Chief Executive Ralph Hake said in a statement that going private would give the company more flexibility to accomplish its long-term goals.
Ripplewood manages more than $12 billion in capital and has investments in such diverse industries as automotive, retail, banking and entertainment. Previously, the company has been more about buying into iconic Japanese companies.
Maytag said it intended to recommend to its shareholders that they embrace the deal.
