Maytag Corp. investor Warren Isabelle said he would probably vote against the $1.13 billion planned purchase of the company by buyout firms because the price is too low.
“There is certainly room for margin expansion,” said Isabelle, president of Boston-based Ironwood Capital Management, which owns Maytag shares among the $400 million under management. “I can’t see the company being sold for that low of a price. I’m hopeful that a third party will recognize that value.”
Shares of Maytag Corp., the third-largest U.S. appliance maker, rose for a second day above the $14-a-share price that buyout firms led by Ripplewood Holdings LLC agreed to pay for the company, suggesting investors expect a higher bid.
The shares jumped 99 cents, or 6.9 percent, to $15.39 at 4:01 p.m. in New York Stock Exchange composite trading and followed a 25 percent jump in the price May 20 after Maytag said it agreed to be acquired.
Ripplewood, Goldman Sachs Group Inc.’s GS Capital Partners and J. Rothschild Group said on May 19 they agreed to buy Newton, Iowa-based Maytag and assume $975 million of debt. Maytag would have to pay $40 million if it doesn’t go through with the acquisition, according to documents it filed today at the U.S. Securities and Exchange Commission.
Appliances, Vacuums
Maytag, maker of Amana and Admiral appliances and Hoover vacuum cleaners, posted its first annual loss since 1995 last year while rivals benefited from lower-cost operations in China and Mexico. The buyout firms plan to update Maytag’s product lines and are expected to move more manufacturing outside the U.S.
Prudential Equity analyst Nicholas Heymann wrote in a research note that he didn’t believe there would be other offers. He said the acquisition announcement came two weeks after an annual meeting at which Maytag’s management talked about the potential to secure new financing and accelerate its restructuring.
“Something clearly changed the company’s willingness to continue to operate as an independent public company,” wrote Heymann, who changed his Maytag rating to “neutral” from “underweight” and doesn’t own the shares.
From Bloomberg