) yesterday completed the first leg of share purchase under the
deal signed last week to attain 66.8% stake in Indesit Company
S.p.A. (IND). The company bought the 4.4% stake held by individual
shareholder, Claudia Merloni, had agreed upon earlier.
Further, the company stated that it awaits judicial and antitrust
approvals before acquiring the remaining shares under the deal. The
acquisition is expected to close by late 2014.
Last week, Whirlpool and Fineldo penned an agreement per which the
latter will sell its stake in Italy's Indesit Company S.p.A. (IND)
to the leading worldwide home appliances producer for $1.03
billion. Fineldo, being a holding company, had a controlling
interest in the Merloni family-owned Indesit, which is a leading
producer and distributor of domestic appliances in Europe.
Also, Whirlpool entered into an obligatory share purchase deal with
some members of the Merloni family, for their shares in Indesit.
Whirlpool's agreement with Fineldo involves a 42.7% stake in
Indesit, whereas its acquisition of the Merloni family shares will
secure 13.2% stake.
Additionally, the company partnered with individual shareholder
Claudia Merloni for her 4.4 % stake in Indesit. Together, this
chunk of Indesit shares to be obtained by Whirlpool represents a
66.8% voting rights in the company.
In all the aforementioned share purchase agreements, shares will be
bought at a price of $15.06 a share, with the exception of the
Fineldo agreement in which the share price will be subject to
various adjustments. Whirlpool intends to sponsor these purchases
with cash, coupled with debt financing from private, domestic and
The acquisition is likely to bring synergies for both Whirlpool and
Indesit. Whirlpool's exclusive quality-oriented perspective toward
achieving long-term growth along with its recognition on a global
platform is likely to be a suitable partner for Indesit. On the
other hand, the acquisition of Indesit will facilitate Whirlpool to
solidify and maintain its foothold in the European appliances
Moreover, the combination of the two companies will enable them to
undertake investments in technology and innovations, which will
further enhance their efficiency. However, Whirlpool currently
carries a Zacks Rank #4 (Sell), as its adjusted earnings per share
came in at $2.20 in the first quarter of 2014, way below the Zacks
Consensus Estimate of $2.30.
However, other-better ranked retail stocks to consider include
Christopher & Banks Corp.
Citi Trends Inc.
The Men's Wearhouse Inc.
), each carrying a Zacks Rank #1 (Strong Buy).
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