What happened
Back in April, shares of commercial foodservice company Welbilt (WBT +0.00%) jumped after it announced plans to be acquired by larger competitor Middleby (MIDD +0.63%). At the time, investors thought the combination that would create a kitchen equipment supply leader in the commercial foodservice space was a good one for shareholders of both companies, and shares of both companies popped.
But today, shares of Welbilt soared 24%, after Reuters reported that Italian foodservice equipment company Ali Group is attempting to outbid Middleby.
Image source: Getty Images.
So what
Though neither company has commented to confirm, Ali Group made an all-cash offer to buy the company for $23 a share earlier this week, the report said. That values the food-service equipment maker at about $3.3 billion, according to the report. It competes with Middleby's all-stock offer that represented an amount equal to $4.3 billion, including debt. The figure represented a 28% premium to Welbilt's 30-day average share price at the time.
Now what
Excluding debt, the Ali Group offer of $3.3 billion compares to $2.9 billion from Middleby. But including debt, the Middleby offer brought the valuation to the equivalent of $4.3 billion.
The details of the potential Ali Group offer haven't been released, but investors today drove shares of Welbilt up beyond the $23 per share value, anticipating a potential bidding war, it seems.
