Welbilt to terminate Middleby merger and proceed with Ali Group’s revised offer

Foodservice equipment manufacturer Welbilt has announced intentions to terminate its existing merger agreement with The Middleby Corporation and enter into a ‘superior’ deal with Italian Ali Group.

Welbilt’s board of directors determined that the revised unsolicited proposal from Ali Holding constituted a “company superior proposal”, compared to the previously announced deal with Middleby.

Under the terms of the revised offer, Ali Group will acquire all the outstanding shares of Welbilt common stock for $24 per share – an increase from its previously disclosed $23 per share proposal made on 25 May – which implies an enterprise value of approximately $4.8 billion.

The revised proposal represents a premium of around 11.4% to the implied transaction value with Middleby. Welbilt previously entered into an agreement back in April to be acquired by Middleyby in an all-stock transaction valued at $4.3 billion.

Welbilt has since notified Middleby that it intends to terminate its existing merger agreement and plans to move ahead with Ali Group’s buyout offer, subject to Middleby’s right to negotiate amendments for five business days.

Founded in 1963, Ali Group designs, manufactures, markets and services a wide range of commercial and institutional foodservice equipment under 80 global brands. The Italian corporation employs approximately 10,000 people in 30 countries.

Ali Group issued the following statement: “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.

“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 revised proposal is binding on Ali Group and may be accepted by Welbilt prior to 14 July. Closing of the transaction is subject to approval by Welbilt stockholders, as well as other regulatory approvals and customary closing conditions.