Monday, 5 May 2014

Update to Whirlpool/Indesit story

Interesting to see Italian newspaper Il Sole 24 Ore report today that Whirlpool is one of the front runners to buy a stake in Indesit, the home appliances company that sponsors Arsenal Football Club.

Here is a link to today's article from: http://carlofesta.blog.ilsole24ore.com/2014/05/per-indesit-lamericana-whirlpool-in-pole-i-turchi-di-arcelik-verso-il-ritiro.html

Loyal Betaville readers will recall that back in late March I revealed Whirlpool had lined up financing to buy Fineldo's stake in Indesit with a view to buying the whole business for Euro 2.3 billion. Here is a link the article: http://betaville123.blogspot.co.uk/2014/03/whirlpool-prepares-takeover-of-arsenal.html

Today's article from Il Sole 24 Ore basically says Whirlpool is vying with the unfortunately-named Arcelik, a Turkish domestic goods company, in the final stages of the auction for Fineldo's 45pc stake in Indesit. Both companies are likely to complete due diligence in the next few weeks, according to the newspaper report.

However, there are certain risks with the deal, say market observers. Firstly, the overall take-out premium for the whole of Indesit is now quite high.

Also, Indesit does a lot of business in Russia and the Ukraine, where the political situation appears to be worsening.

So, a deal is by no means a certainty......

UPDATE: A reader gets in touch to point out Electrolux could afford to pay a high price for Indesit as it would be able to generate the most synergies from a combination with the Italian home appliances company. However, I have no idea whether Electrolux is participating in the auction for Fineldo's stake in Indesit.

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