Jul 24 2005
Maytag Corporation announced today that its Board of Directors has determined that Whirlpool Corporation's revised proposal, announced on July 22, may reasonably be expected to lead to a transaction that is financially superior to Maytag's pending transaction with the Ripplewood-led Triton Acquisition group and that is reasonably capable of being completed.
Under Maytag's existing merger agreement with Triton Acquisition, this determination is a prerequisite for Maytag to furnish information to, and have discussions and negotiations with, Whirlpool. Maytag stated that, in reaching its determination, the Board took into account Whirlpool's representation as to a complete lack of opposition to the transaction from the top 20 trade customers and buying groups, including the top four retailers and top three buying groups that represent 90% of retail appliance sales. Maytag said that it expects that the terms of a definitive agreement, if any, with Whirlpool will take into account the risks to Maytag of non-consummation, Whirlpool's assertion that the antitrust clearance process can be completed by the end of 2005, and Whirlpool's overwhelming confidence that there is no antitrust problem in a Maytag/Whirlpool combination.
For example, Whirlpool has publicly stated that the transaction poses "no risk to competition," that it is "not motivated by, nor could it produce, anticompetitive effects," and that "there is no plausible concern that competition would diminish in any product category." Maytag also reported that following the making by Whirlpool of its earlier proposal, Triton Acquisition informed Maytag that, in Triton Acquisition's view, the transaction proposed by Whirlpool did not satisfy the prerequisites for Maytag's Board making the determination required under the merger agreement in order to furnish information to, and have discussions with, Whirlpool, including that such transaction "is reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects." Triton Acquisition has also advised Maytag, as Triton Acquisition did, and as was previously reported by Maytag, concerning discussions and due diligence between Maytag and Haier, that discussions, negotiations and/or due diligence by Maytag with Whirlpool will, in Triton Acquisition's view, give Triton Acquisition the right to terminate the existing merger agreement.
Maytag believes that its actions are in accord with the merger agreement and do not give Triton Acquisition any termination rights. Maytag also said that its Board of Directors has not changed its recommendation of the existing Maytag/Triton Acquisition transaction. Notwithstanding the determination that the Whirlpool proposal may reasonably be expected to lead to a financially superior transaction that is reasonably capable of being completed, Maytag noted that the Whirlpool proposal is, among other things, uncertain as to the 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. Maytag noted that before it would be willing to share competitively sensitive information it would require greater certainty with respect to these and other issues. In contrast, the Triton Acquisition transaction is expected to close within a month and, subject to shareholder approval and completion of financing, has already satisfied the major conditions to closing.