Aga bidding war could see price hit £160 million

Shares in the company rocketed yesterday after it was revealed that American appliances giant Whirlpool was mulling a bid for the company which could blow the £129 million offered by Middleby Corp out of the water.

Shares in the company rose by more than 12 per cent to more than 205p yesterday, well ahead of the 185p per share being offered by Illinois-based Middleby.

And Matthew McEachran, analysts at N+1 Singer, said the value of the company could well escalate if a rival bid came into play.

"The relatively low offer from Middleby left the door open to a competing offer and Whirlpool have now come into the frame and have been granted time to do due diligence, one of a number of conditions to any offer being made," he said.

"If a bidding war breaks out there can be no saying where the upside may cap out at, but an increase from 185p certainly looks likely now. Another 50p would be a perfectly reasonable expectation for Whirlpool to kick things off."

That would take the total value of the company past the £160 million mark.

The Middleby deal was considered a good fit for Aga, as it eliminated the company's historic £69 million pensions deficit, while the American firm was making positive noises about retaining skills and jobs in Telford, using the site to access European cooker markets.

At this early stage, little is known about Whirlpool's intentions, and the Michigan-based company was keeping its cards close to its chest.

In a brief statement in the light of Aga's announcement, it said: "In response to the announcement from Aga that Whirlpool has made an approach regarding a possible offer for Aga, Whirlpool confirms this to be the case.

"A further announcement will be made in due course if appropriate, but there can be no certainty that a formal offer will be made or as to the terms of any offer."

Costs associated with the takeover bid left Aga nursing a £4 million pre-tax loss for the first half of the year, although the outcome of the election helped boost sales by 1.5 per cent to £125.4 million, and operating profits – excluding one-off costs – were higher.

The takeover battle comes after Aga appointed advisers Rothschild to help assess ''development opportunities'' for the business at the start of this year.

It first revealed talks with Illinois-based Middleby in June, before agreeing the deal a month later.