HWI takeover rumours surface again

By Matthew Henry

SYDNEY: Breville and Kambrook’s parent company, Housewares International (HWI), is again the subject of speculation with reports suggesting the company has re-emerged as a takeover target for US equity firm, Harbinger.

According to an analyst quoted in the Sydney Morning Herald, the news of a merger between small appliance company Salton and Applica completed by Harbinger in the US this week could mean the company will shift its focus to HWI, and potentially GUD Holdings, the maker of Sunbeam and Victa products.

"In our view, HWI (Housewares) and GUD’s Sunbeam division would be a good fit for such a global company," said Goldman Sachs JBWere analyst, George Batsakis, quoted in the SMH.

"We expect last night’s announcement will bring potential corporate activity to the fore again."

Harbinger is already a 19 per cent stakeholder in HWI, and if rumours regarding a takeover of the two appliance companies continue to build, share prices could also rebound.

"Potential corporate activity was a key factor underpinning the HWI and GUD share prices,” said Batsakis.

"But the share prices of HWI and GUD have fallen over the past two months as news flow on a potential takeover abated. We expect (the merger) announcement will bring potential corporate activity to the fore again. We also forecast improved operating results from both HWI and GUD."

The news has revived speculation about the future of the two local appliances businesses, which was rife earlier this year.

In March, HWI was reportedly receiving bids to purchase the Breville business following its sale of its housewares division.

HWI confirmed it had been approached by a number of companies considering a takeover of the entire business.

GUD also confired to Current.com.au in July this year that it had received takeover offers, sparking a rise in the company’s share price. But GUD’s board rejected the offer on the grounds that it was "incomplete, highly conditional and did not reflect the Company’s fundamental value and growth opportunities”.

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