Welbilt has given a brief update on its stance as it finds itself in the middle of a buyout battle between rival industry giants, Middleby and Ali Group.
Within a form, filed with the US Securities and Exchange Commission regarding the proposed merger with Middleby, Welbilt set out the timeline of events.
The text stated: “Following their respective board meetings, Welbilt and Middleby executed and delivered the merger agreement and Middleby and the Icahn Stockholders [Welbilt stockholders affiliated with American businessman Carl Icahn] executed the Icahn Support Agreement on the evening of 20 April 2021.
“Prior to the open of trading on the New York Stock Exchange and the NASDAQ on the morning of 21 April 2021, Welbilt and Middleby issued a joint press release announcing the transactions contemplated by the merger agreement, and Welbilt and Middleby hosted a joint investor call to discuss the transaction.”
However, the document then goes on to detail: “On 25 May 2021, Welbilt received an unsolicited written proposal from Ali Group to acquire 100% of the outstanding Welbilt common stock in an all-cash transaction at a price of US$23.00 per share, which proposal was subsequently shared with Middleby in accordance with the terms of the merger agreement.
“On 26 May 2021, the Welbilt transaction committee and subsequently the Welbilt board held virtual meetings at which representatives of Welbilt’s senior management team, Morgan Stanley and Gibson Dunn were present to discuss Ali Group’s proposal. The Welbilt board directed Morgan Stanley to seek clarification regarding certain aspects of Ali Group’s proposal.”
“On 28 May 2021, the Welbilt board held a virtual meeting at which representatives of Welbilt’s senior management team, Morgan Stanley and Gibson Dunn were present and determined that Ali Group’s proposal constitutes or is reasonably likely to constitute or result in a Company Superior Proposal [a written acquisition proposal for at least two thirds of company shares, or substantially all of a company’s assets].”
Welbilt responded to Catering Insight’s request for further information, detailing that it has not and does not plan to issue another release at this time.
Middleby’s proposed US$4.3bn (£3.08bn) deal would see the group closing the merger in late 2021, pending regulatory approvals and customary closing conditions. The conglomerate believes its deal gives US$120m (£84.6m) of synergies and operational improvements, and delivers substantial value to Welbilt’s shareholders. It dismissed Ali Group’s bid as “highly opportunistic and conditional”.
While Ali Group itself claimed that the US$23 per share proposal delivers “significant cash premium value to Welbilt shareholders and is superior in every respect to Welbilt’s pending all-stock transaction with Middleby”.