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Ali Group Makes Move to Acquire Welbilt

Update June 1, 2021: Since Ali Group confirmed it made an offer to acquire Welbilt several developments have occurred.

On May 28, Middleby issued a statement reiterating the company’s intention to acquire Welbilt. In doing so, Middleby cited several reasons why the company feels its offer is superior to the one made by Ali Group.

That same day, Welbilt said the deal from Ali Group was likely superior to the one offered by Middleby Corp., per a published report from Reuters. In a regulatory filing, Welbilt said its board had met earlier in the day and decided the Ali Group offer “constitutes or is reasonably likely to constitute” a superior proposal.

May 28, 2021:

Ali Group has tossed its hat in the ring to acquire Welbilt.

The announcement comes roughly a month after news hit that The Middleby Corp. would acquire Welbilt in what was planned as an all-stock transaction between the two publicly traded companies. That deal was expected to close by the end of 2021, and boards of directors for both companies had already approved the deal, per a Middleby release at the time.

Now there is another player in the mix for Welbilt as privately held Ali Group confirmed it submitted a proposal to the board of directors of Welbilt Inc. to acquire all the outstanding shares of Welbilt common stock for $23 per share in cash. In addition, Ali Group will obtain binding commitment letters for any debt financing prior to signing a definitive merger agreement, per an Ali Group release.

The Ali Group proposal represents a premium of 47.2% to the Welbilt share price as of April 20, 2021 — the last trading day prior to the pending Middleby-Welbilt all-stock transaction. It also includes a premium of approximately 13.9% to the implied value of the Middleby transaction as of May 24, 2021 — the last trading day prior to Ali Group submitting its proposal to Welbilt.

Under the terms of the Middleby-Welbilt agreement, Welbilt shareholders would receive a fixed exchange ratio of 0.1240x shares of Middleby common stock for each share of Welbilt common stock in an all-stock transaction. Based on Middleby’s volume-weighted average price during the 30 consecutive trading days ending April 20, 2021, the offer price represents a 28% premium to Welbilt’s 30-day VWAP.

In its release announcing the intent to acquire Welbilt, Ali Group said it is highly confident it will gain approvals to close the deal.