The Register is reporting on the sale of Maytag with headline and copy stating the deal is worth $2.1 billion (In fact the headline says “sold to … for $2.1 billion”). Yet, the WSJ puts the deal at $1.1 billion (sorry, subscription required).
I’d go with the WSJ on this one. It’s hard to think professional business writers at the WSJ would get it wrong.
After doing a little digging, it turns out the Maytag press release states the aggregate deal is worth $2.1 billion – including the assumption of about $1 billion in debt. But the actual cash the investors are paying out is $14 per share. And with about 79 million outstanding shares, that would be about $1.1 billion in cash for the purchase of Maytag.
The Register has to do a better job on business reporting. It can’t just regurgitate numbers from press releases. Press releases always try to make the size of deals look bigger than they are.
Finally, this is a telling quote from the WSJ article:
Removing Maytag from the public spotlight will give the appliance maker critically needed breathing room to address big structural problems. Notably, Maytag has been slow to move manufacturing overseas to capitalize on lower labor costs.
I guess the Newton plant is going to close.
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Ya think?
I have often thought that when I buy my own home I would put Maytag appliances in it because I thought they were a good company that fought to keep it’s manufacturing in the US and had a good push toward more ecologically friendly appliances, but I guess I will be free to buy whatever I want now.
[…] ons a common financial reporting mistake made by many newspapers. (And one that I’ve written about before). The last link to the Chicago Tribune story is ba […]
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