Maytag Washes Out A Red Stain

Never mistake Chief Executive Leonard A. Hadley for Maytag Corp.'s "lonely repairman." Since taking over the company's top spot in 1992, Hadley has poured more than $300 million into stodgy factories, overhauled the company's product line, and reinvigorated lackluster marketing efforts. On May 30, Hadley made his biggest move yet, selling Maytag's loss-plagued Hoover Europe unit to Italy's Candy for $170 million.

By fixing so many problems, though, Hadley may have created another: Maytag itself may be up for grabs. Shorn of Hoover Europe, some analysts think the company is now an attractive target for a foreign buyer looking to crash the lucrative North American appliance market. Says ex-Hoover Group President Frank Vaughn: "I'm sure there are a lot of companies looking at them."

Indeed, Maytag presents an attractive entree to the U.S. In Maytag and Jenn-Air, it owns some of the nation's best high-end brands. And last year, its net income rose 189%, to $147.9 million, on sales of $3.4 billion. One Wall Street analyst believes Maytag could be bought by the end of 1995, fetching as much as $3.5 billion. Likely bidders: German appliance maker Bosch-Siemens Hausgerate, as well as Korean manufacturers Hyundai, Samsung, and LG Group.

Most investors had hoped for a buyer in the early 1990s, when Maytag was floundering. The low point: a promotion that offered British customers, among other premiums, free air travel to the U.S. for a purchase of $375 or more. The deal attracted 200,000 takers, forcing $72.6 million in pretax charges. Two years later, says Raymond A. Perrier, brand-evaluation director for Interbrand Group, "their image still hasn't recovered completely."

That's why nobody cried when Hoover Europe fetched $50 million less than analysts predicted. "It's good the problem is behind them," says Merrill Lynch & Co. appliance-industry analyst Jonathan L. Goldfarb. The problem now: staying independent.

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