American giant Whirlpool bid to gatecrash Aga takeover

Aga, which has a foundry in Coalbrookdale and a factory in Ketley, is just a fortnight away from sealing its deal with another US company, Middleby Corporation, which agreed takeover terms with the iconic cooker company back in July following months of behind-the-scenes talks.

Now Whirlpool, a $20 billion a year business with 100,000 employees, has approached Aga's management with a rival offer. The details are not being revealed but, confirming the approach today, Aga said it has granted due diligence access to Whirlpool, to check over its books and accounts, and is in discussions with the Illinois-based household appliance group about other aspects of a possible offer.

Aga said in a statement: "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."

In the meantime, "given the conditionality of the Whirlpool offer" Aga's directors say they believe it is in the best interests of shareholders to ensure the current takeover deal, agreed in July following months of behind-the-scenes talks, should go ahead on the existing timetable "to avoid any delay to completion of that transaction should a firm offer from Whirlpool not be forthcoming".

A special shareholder meeting will be held on September 8, and the board is recommending investors back the Middleby deal. But Aga management say approving the deal "will not prejudice the company's ability to recommend any formal offer by Whirlpool to AGA shareholders, should a formal offer which is capable of recommendation be forthcoming".

Whirlpool issued a brief statement this morning, saying: "In response to the announcement from Aga that Whirlpool has made an approach regarding a possible offer for AGA, Whirlpool confirms this to be the case.

"A further announcement will be made in due course if appropriate, but there can be no certainty that a formal offer will be made or as to the terms of any offer."

The deadline for going ahead with the Middleby scheme is September 16, so Whirlpool has until then to come up with a firm bid.

Announcing the Middleby deal earlier this summer, Aga bosses insisted the move would benefit to the company's local workforce, settling a long-standing, £69 million pension deficit and creating new business for the company's local factory and foundry.

"This is a growth story," said chief executive William McGrath. "The way we are developing Aga with more focus on production at the factory should be a positive. We are looking to move volumes here, with levels of the new product coming through. We are not looking to see any radical alterations to our strategy.

"What we have been looking at is to ensure that the volume through the factories goes up, and if that happens that can only be for the benefit of the workforce as a whole."

He added: "Middleby, as a larger group, will provide new impetus to the business and hopefully Aga will thrive under its umbrella."

While the move will allow some of Middleby's previously acquired product ranges – such as the Viking line of cookers – to be introduced into the UK market, that is more likely to be incorporated into the less-specialised Rangemaster side of the business, based in Leamington Spa.

Selim Bassoul, chairman and chief executive officer of Middleby, said: "The addition of Aga's world class brands, product range and manufacturing capability to our existing portfolio will further strengthen Middleby's global reach and enhance our position as a leader in the premium segment for residential kitchen equipment," he said.

"This acquisition will expand Middleby's local manufacturing platform and significantly increase our presence in the UK market."

Local union bosses were also positive about the prospects of the move, and Unite regional officer Matt Jones said: "Unite and our members are hopeful of a positive relationship with Middleby Corps and are hoping the takeover is a positive step for job security and investment at the Telford and Leamington Spa sites.

"Middleby Corp's global marketing and distribution could be a huge positive for the Aga product range's growth."

Aga's owners appointed financial advice group Rothschild to look for a buyer early this year. The company has been making a public play of its attempts to reposition itself for new markets for some time, introducing a string of new products and finding partners to take it into new markets.

Aga moved into China for the first time earlier this year, which combined with the release of the new mini-Aga for use in smaller properties was aimed at creating an Evoque moment – aping the success of JLR in wooing the growing Asian middle class.

It has invested heavily in bringing its production facilities in Telford up to the mark, with the opening of a new sand plant at Coalbrookdale in May being hailed as a guarantee of the plant's future.

In Middleby, Rothschild found a company which is in the midst of a spending spree and has access to all the markets that could transform Aga into a global brand.

The American firm has completed 20 acquisitions over the last five years, in a variety of business sectors, including in the UK. Lincolnshire-based catering equipment firm Lincat was snapped up in 2011, and Norwich-based slicing equipment firm Marel in February this year.

It says the range of brands that are coming into its group will complement those it already owns, so Aga is a brand that is very much here to stay. Last year, Middleby achieved sales of US $1.63 billion (£1.04 billion), and profit of $193 million (£123 million).

"We are providing a European platform," said Mr McGrath. "They are keen to have the premium brands, and Aga Rangemaster provides exactly that. They have international distribution strength in North America and into South America, and with the work we have been doing the opportunity to progress in those markets is increased.

"What it means for the business is the work we have done in developing new products, will have more opportunities to progress in international markets more readily than we would have been able to under our own steam."