Middleby Corporation’s proposed acquisition of Welbilt has been left in doubt after fierce rival Ali Group confirmed it had tabled a higher cash bid for the company.
The Milan-based outfit, which owns 80 catering equipment brands, has submitted a proposal to Welbilt’s board that would see it acquire all of the outstanding shares of Welbilt common stock for $23.00 per share in cash.
The proposal represents a premium of 47% on Welbilt’s share price on the day prior to Middleby’s offer of an all-stock transaction, and a premium of 14% on the implied value of the Middle transaction on the day prior to its own offer, which it lodged on 25 May.
Ali Group said it has “substantial cash” on hand and has received a ‘Highly Confident Letter’ from Goldman Sachs International for new financing to fund the proposed transaction.
It will obtain fully underwritten, binding commitment letters for any debt financing prior to signing a definitive merger agreement, which will not contain any financing condition.
Ali Group said it is also “highly confident” its proposed transaction will obtain all necessary regulatory approvals in a timely manner without the uncertainty created by the antitrust provisions contained in the Middleby transaction.
In a statement, Ali Group said: “Ali Group has a 60-year history in the foodservice equipment sector and has long-admired Welbilt. Our $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.
“In addition to superior value, our proposal offers greater certainty of closing for Welbilt and its shareholders. We and our advisors look forward to engaging with Welbilt and its advisors to quickly negotiate and finalize a definitive agreement.”
Ali Group employ approximately 10,000 people in 30 countries and, in terms of sales, is one of the world’s largest groups in this industry.
It has 58 manufacturing facilities in 15 countries and sales and service subsidiaries throughout Europe, North America, South America, the Middle East and Asia Pacific.