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Whirlpool (WHR; Baa2/BBB-/BBB Neg) potential bid from Robert Bosch (RBOSGR: NR/A/A)

CONSUMER CYCLICALS
  • $ lines -10-20 tighter, €lines: WHR -6-9bps, RBOSGR +4-8 wider, WHR CDS leading -60bps.
  • Moves may make look large for unconfirmed and early stage reports but WHR is coming in from wides - still trades outside BAT in equal rated Tobacco.
  • Cap. allocation is a bit confusing; paid $384m in dividends from $366m in FCF leaving BS net 3.6x yet says it "prioritizes debt reduction" into a net 2x target - it's targeting that only by 2026 which explains the dividends away.
  • Guidance for FY24 (same as CY) is flat headline, EBIT margin contraction of 10bps to 6.8%, FCF increasing to $550-$650m, dividends of $400m and BS largely unch at net<3.5x.
  • WHR 27/28s may have more room to go here, unlike TPR downside looks limited but we would caution its holding net leverage metrics to satisfaction of raters against $1.6b cash on hand.
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