The City returned from its summer holidays to find a genuine Aga saga unfolding as the giant US appliances maker Whirlpool gatecrashed a cosy £129m takeover agreed with an American rival.
Aga Rangemaster, the maker of the classic cast-iron country kitchen cookers as well as more modern range cookers, announced it had received a last-minute approach from Whirlpool with a potential cash offer.
Aga shareholders are due to vote next Tuesday on a 185p-a-share cash bid from the catering equipment maker Middleby, which appeared on the scene in June. That bid could then go final a week later, on 15 September.
Aga shares jumped 15 per cent or 26.75p to 210p, with traders saying Whirlpool would need to have offered at least 10 per cent more than Middleby to get a look-in so late in the day. That pushed the value of the business up to £142m.
Aga said it had opened its books to Whirlpool after the approach, which came at the end of last week.
It added: “The making of a firm offer by Whirlpool remains subject to a number of conditions and there is no certainty that any offer will be forthcoming or as to the terms of any offer.”
The company said this meant it would press ahead with the Middleby takeover, which values it at £129m, to give shareholders certainty even if Whirlpool were to walk away. It has also contacted the UK Takeover Panel to ask it to impose a “put up or shut up” deadline on Whirlpool.
Middleby made no immediate comment on the surprise intervention by Whirlpool but would have the right to top any offer made by its rival.
When it comes to the Whirlpool offer, Aga will be looking for similar or better promises to those made by Middleby. Those included retaining manufacturing in the UK and, crucially, detailed plans to deal with Aga’s massive pension deficit, which stood at £84m at the end of last year.
Aga hired the investment bank Rothschild in January to look at options for the business and its pension fund problem. Half-year results showed a pick-up in sales and profits but also higher costs for the pension fund. Growth was driven particularly by a new range of smaller Agas designed for urban living, which can be controlled through a smartphone.
At the time Aga’s chief executive, William McGrath, who has run the business for the past 14 years, said: “Our core market remains the UK, and with an economic and political backdrop that is likely to be conducive to increased levels of consumer spending on household goods, from which we expect to see the recent trends of higher sales and profits continue.”
The first Aga was invented by the Nobel prize-winning Swedish chemist Gustaf Dalen in 1922. Blinded by an acetylene explosion 10 years earlier, he said he had invented the all-in-one cooker, water heater and laundry drier to help his wife, who was exhausted by years of looking after him. The cookers first appeared under licence in the UK and the brand was bought by Allied Ironfounders in the late 1930s.Reuse content