Aga saga heats up as stove maker gets approach from second US suitor

Manufacturer of cast-iron cookers favoured by middle class receives approach from Whirlpool that could stymie £129m Middleby takeover.

Aga Rangemaster, the maker of cast-iron cookers favoured by the English middle class, has become the subject of a bidding war between two US companies after Whirlpool made a takeover approach.

The UK company said Whirlpool, the world’s biggest appliance maker, had contacted it about making a cash bid. Aga said it would open its books to let the company decide whether to make a formal bid. Whirpool is understood to have made its approach in the past few days.

Whirlpool’s approach could derail Aga’s agreement in July to sell itself to Middleby, a US food services business, for £129m in cash. Aga said without a firm bid from Whirlpool it would proceed with its sale to Middleby, which is due to be approved by shareholders on 8 September If shareholders back the Middleby offer, the Aga board will decide whether to enter a binding “sanction” agreement on the planned date of 16 September. It could delay the date of the binding agreement if Whirlpool made an offer.

Aga said: “The board of Aga retains the ability to adjourn the sanction hearing if it receives an offer from Whirlpool prior to this deadline which it would intend to recommend to Aga shareholders or if it otherwise considers an adjournment necessary.”

Whirlpool’s intervention pits two US companies against each other to take Aga into foreign ownership more than 80 years after its kitchen ranges were first manufactured in Britain. Middleby’s offer of 185p a share was 77% more than Aga’s closing share price the day before it revealed it was in talks with Middleby. Its shares jumped 8% to 198p in early trading on Tuesday as investors bet that a higher bid was in the offing.

The Aga cooker, made mainly from scrap metal, absorbs heat from a constantly burning source, which is then used for cooking.

The cookers became an established part of cultural life in 1990 when the Oxford Companion to English Literature first included the term “Aga saga” – intended to sum up the novels of Joanna Trollope and once characterised as tales of illicit rumpy-pumpy in the countryside. Trollope thought the term “patronising” of readers. The set of the BBC’s rural radio soap opera, The Archers, also has a real Aga to get the authentic sound of the iron door closing.

Aga employs about 2,500 people with more than 2,000 of them working at its factories and offices, mainly in the UK. It also has plants at Leamington Spa, Long Eaton in Derbyshire and Ketley in Shropshire. Though best known for the cookers that sell for up to £15,000, it also owns the upmarket Fired Earth tiles and home decoration business.

Whirlpool’s brands in the US include Maytag, Kitchen Aid AGA Saga Heats Upand Jenn-Air. In the UK, Whirlpool sells washing machines, dishwashers and other appliances under its own brand.

Aga said when it announced the takeover by Middleby that the deal would increase sales of Aga and Rangemaster cookers in the US and give Middleby a base to expand into consumer products outside the US.

http://www.theguardian.com/business/2015/sep/01/aga-saga-rangemaster-heats-up-stove-maker-approach-second-us-suitor

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