Middleby manufactures a wide range of kitchen equipment for commercial foodservice and food processing industries. Credit: Alex Robert on Unsplash.

American foodservice equipment provider Middleby has announced that the company will not increase its offer to acquire Welbilt.

The announcement comes after Italian foodservice equipment manufacturer Ali Group raised its all-cash offer to acquire Welbilt.

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In April, Middleby entered a definitive merger agreement to buy smaller contender Welbilt in an all-stock transaction valued at $2.9bn.

Middleby said that it will not make any changes to the proposed agreement and allow the five-day period in which it could match the offer from Ali Group to expire. This would lead to the termination of the merger agreement.

Under the deal, Middleby will be entitled to receive $110m from Welbilt to terminate the merger.

Middleby CEO Timothy FitzGerald said: “We believe that the previously agreed terms of the merger agreement between Middleby and Welbilt offered significant long-term strategic value to the Welbilt shareholders through the ability to participate in substantial upside opportunity from Middleby’s continued growth while remaining attractive to our existing Middleby shareholders.

“As we considered our options over the course of the match period, we concluded to deploy our substantial financial resources wisely. We are excited about the momentum of our business and future prospects of our three-industry leading foodservice platforms.”

This May, Ali Group proposed to acquire all the outstanding shares of Welbilt common stock for $23 per share in cash for nearly $3.3bn.

Earlier this month, Ali Group submitted a definitive proposal and merger agreement to the Welbilt board of directors to acquire all outstanding shares of the latter’s common stock for $24 per share in cash.

The decision of Middleby could further strengthen the Italian company’s proposal.