Manitowoc wins Enodis auction with $2.7 billion bid

CHICAGO Tue Jul 1, 2008 6:49am EDT

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CHICAGO (Reuters) - Manitowoc Inc (MTW.N) said on Monday it had beat out Illinois Tool Works Inc (ITW.N) (ITW) in the official auction for British kitchen equipment maker Enodis Plc ENO.L.

Manitowoc said it will pay 328 pence for each Enodis share, and assume about $249 million of the U.K. company's debt, bringing the total value of the deal to about $2.7 billion.

Enodis, which makes fast-food fryers, became the center of a takeover tussle between the two U.S. diversified manufacturers this spring. The two bidders saw Enodis, which counts Burger King BKC.N and McDonald's (MCD.N) among its customers, as a way to play on rising demand for fast food in markets such as Asia.

Manitowoc, which makes cranes and restaurant equipment, originally offered 260 pence a share for Enodis in mid-April -- nearly double what the company was trading for at the time.

In early May, ITW made a rival offer of 282 pence, which prompted Manitowoc later to raise its offer to 294 pence a share -- or about $2.1 billion -- two weeks later.

That prompted Britain's takeover regulator to step in and set up an auction to "provide an orderly framework for the resolution of this competitive situation."

The transaction is expected to close in the fourth quarter of 2008, Manitowoc said, pending approval by Enodis shareholders.

It also requires U.K. court approval and other regulatory OKs.

In a statement, Glen Tellock, Manitowoc's president and chief executive officer, said, "Even at the higher price, we believe the strategic benefits of the combination are significant."

Manitowoc said it believes that the integrated companies, which would have had combined annual sales of $5.6 billion in the most recent year, would generate annual cost-saving synergies of more than $80 million.

Provided the deal closes as anticipated, Manitowoc said it believed it would add to its earnings per share in 2009.

And while acknowledging that it faced "extreme" headwinds as a result of rising commodity costs, Manitowoc reaffirmed its previous earnings guidance of a range of between $3.20 and $3.40 a share in 2008, excluding the merger.

(Reporting by James Kelleher, editing by Phil Berlowitz)

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