Welbilt is closer to choosing between its two acquisition suitors, determining the revised all-cash offer from Ali Group to be the superior proposal.
As a result, Welbilt notified Middleby of its intention to terminate Middleby’s merger agreement in favor of a definitive merger agreement with Ali Group. The decision is subject to Middleby’s right to negotiate amendments to the merger agreement for five business days and the Welbilt Board of Director’s further determination as to whether any such amendments would cause the Ali Group proposal to no longer constitute a “company superior proposal.”
The courtship of Welbilt began in April when Middleby submitted a $2.9 billion all-stock offer to purchase the foodservice equipment manufacturer. Ali Group entered the fray a month later when it submitted a $3.3 billion all-cash bid for the company that would pay out $23 a share. On July 5, Ali Group increased that offer to $24 a share, which implies an enterprise value of approximately $4.8 billion.
“Ali Group has completed due diligence and secured committed financing, and our proposal continues to be superior in every respect to Welbilt’s pending all-stock transaction with Middleby, with a significant premium to Welbilt shareholders and a clear path to completion,” Ali Group said in a statement. “Further, given the minimal product overlap between our two companies and the fact that our proposed transaction does not require an Ali Group stockholder vote, we believe our proposal offers far greater certainty of closing than the Middleby transaction.”
The proposal is binding on Ali Group and may be accepted by Welbilt before July 14. Closing of the transaction would be subject to approval by the stockholders of Welbilt, receipt of other regulatory approvals and other customary closing conditions.