News Release
WHIRLPOOL CORPORATION PROPOSES TO ACQUIRE
MAYTAG CORPORATION FOR $17 PER SHARE
Transaction Provides Maytag Shareholders With 21% Premium
Over Current Merger Agreement
Benton Harbor, Mich., July 17, 2005 – Whirlpool Corporation (NYSE: WHR) today announced that it has made a proposal to acquire Maytag Corporation (NYSE: MYG) for $17 per Maytag share. The total value of the offer represents a 21% premium over the price offered by Triton Acquisition Holding in their current agreement with Maytag. This transaction is valued at $2.3 billion in cash and stock (based on assumed debt of $969 million). Whirlpool’s proposal is subject to the satisfactory completion of due diligence and negotiation of a mutually acceptable definitive merger agreement.
“This transaction will provide Maytag shareholders with superior value compared to the current offer,” said Jeff M. Fettig, Whirlpool’s chairman, president and CEO. “Equally important, the combination fits Whirlpool’s strategy and capabilities, will create strong value for our shareholders and provide direct benefits to consumers and trade customers.”
Text of the proposal letter delivered to the CEO and Chairman of the Special Committee of Maytag is included at the end of this press release.
Whirlpool is being advised by Greenhill & Company, Weil Gotshal & Manges, and The Boston Consulting Group.
Whirlpool also announced that, based on its assessment of the current environment, it continues to expect full-year 2005 earnings per share of $5.90 to $6.10, cash provided by operating activities of approximately $860 million, and free cash flow in the $250 to $300 million range (see table below).
The company has scheduled a conference call to discuss the Maytag proposal with members of the financial community at 11:00 a.m. (EDT) on Monday, July 18.
Individuals who would like to participate in the Maytag proposal conference call should call (877) 502-9274 and use confirmation code 6451879. International participants should call (913) 981-5584 and use confirmation code 6451879.
Whirlpool will be discussing its second quarter results as expected during its previously scheduled conference call on Thursday, July 21, at 10:00 a.m. (EDT).
The table below reconciles cash provided by operating activities as prepared in accordance with accounting principles generally accepted in the United States to free cash flow. Management believes this comparison of free cash flow provides shareholders with a relevant measure of liquidity and a useful basis for assessing the Company’s ability to fund its activities. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similar performance measures whose calculations may differ from the Company’s calculations. Free cash flow is cash provided by operating activities after capital expenditures, proceeds from the sale of fixed assets and dividends paid.
(millions of dollars)
2005
Projection (1)
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Cash provided by operating activities 862
Capital expenditures (500)-(550)
Proceeds from sale of fixed assets 50
Dividends paid (112)
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Free cash flow $250 - $300
Note (1): Amounts for 2005 included in the table above are projections. Such projections are based upon many estimates and are inherently subject to change based on future decisions made by management and the board of directors of the company and significant economic, competitive and other uncertainties and contingencies.
Whirlpool Corporation is the world’s leading manufacturer and marketer of major home appliances, with annual sales of over $13 billion, 68,000 employees, and nearly 50 manufacturing and technology research centers around the globe. The company markets Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other major brand names to consumers in more than 170 countries.
Additional information:
This material may contain forward-looking statements that speak only as of this date. The company disclaims any obligation to update such information. Forward-looking statements include, but are not limited to, statements regarding expected earnings per share and cash flow for the full year 2005. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that those expectations will prove to have been correct. A discussion of certain factors that could cause results to differ materially from those anticipated is found in the company's most recently filed Form 10-Q or Form 10-K. Other recent factors are whether the company’s proposal to acquire Maytag Corporation will be successful and, if the acquisition is completed, whether the expected benefits will be realized.
This material is not a substitute for the prospectus/proxy statement Whirlpool and Maytag would file with the Securities and Exchange Commission if a negotiated agreement with Maytag is reached. Investors are urged to read any such prospectus/proxy statement, when available, which would contain important information. The prospectus/proxy statement would be, and other documents filed by Whirlpool and Maytag with the Securities and Exchange Commission are, available free of charge at the SEC's website (www.sec.gov) or from Whirlpool by directing a request to Whirlpool Corporation, 2000 North M-63, Mail Drop 2800, Benton Harbor, MI 49022-2692, Attention: Larry Venturelli, Investor Relations.
Whirlpool is not currently engaged in a solicitation of proxies from the stockholders of Maytag in connection with Whirlpool's proposed acquisition of Maytag. If a proxy solicitation commences, Whirlpool, Maytag and their respective directors, executive officers, and other employees may be deemed to be participants in such solicitation. Information about Whirlpool's directors and executive officers is available in Whirlpool's proxy statement, dated March 18, 2005, for its 2005 annual meeting of stockholders. Additional information about the interests of potential participants will be included in the prospectus/proxy statement Whirlpool and Maytag would file if a negotiated agreement with Maytag is reached.
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Contact: Whirlpool Corporation
Media: Tom Kline, 269/923-3738
thomas_e_kline@whirlpool.com
Financial: Larry Venturelli, 269/923-4678
Larry_m_venturelli@whirlpool.com
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