It appears Briggs has the upper hand in its bid for Murray. Auction still appears to be for this Friday. Also that Briggs is not planning to file its final "agreement" until the last minute. IMO this is a planned strategy to give other possible bidders as little time as possible to respond.
I am also guessing that Briggs if they wins the bid there will have to be a tough negotiation with the United Auto workers Union. Murray's operations will have to be profitable for it to stay Tenn. No real estate envolved in Briggs bid so nothing saying it can't move to a profitable location. Should be an interesting couple of weeks-months.
Why would Briggs want Murray? All the Murray acquisition will do is dilute earnings. Murray provides the vehicle (low profit vehicle) to take Briggs goods to market. Murray is very challenged with dominant retailers on one side and dominant suppliers on the other. Briggs just needs viable companies to take their goods to market, they shouldn't own one. While Briggs has more brand equity than Murray, AYP or MTD, they really shouldn't jump into this game!
You miss the big picture. Briggs is rounding out a retail strategy here. They have commercial (some Snapper and Ferris), they have higher end consumer (some Simplicity), they have a toe in the water with marine (3 HP electric and 5 HP gas), they have power generators (Generac), they have some utility products (Giant Vac), they have, well, you get the picture.
Briggs rolled out "The Dealer Line" in full force at this year's L&G show in Louisville (Oct 2004-ish). They're tying all these lines together so that they can bring the power equipment directly to the market, a la Tractor Supply Corp. (which privately-held MTD has a stake in, by the way!). This is the supplier's way of saying f*&k you to the Wal Marts of the world, and keeping some of the margin for themselves.
Will this work? Time will tell. I'm betting that BGG will make it work, but it will take some skillful execution, and a lot of patience by shareholders.
Disclaimer: As always, IMHO. Position disclosure: Flat (BGG, WMT)
P.S. - here's another reason BGG dragged its feet with the Murray buyout:
Good Question. My guess is that it all depends what Briggs has to pay to lockup the "low ccost vehicle" as you call it. It the price is right then locking up the customer is very smart. On the other hand I would like to see Murray be able to stand on its own feet as a profitable division of Briggs, taking of course Briggs is sucessful in its bid. that would give Briggs the profit on its engins and on the value added by Murray. If Murray cannot do that then the verticle integration with Murray is not in Briggs best interest. We should know their plans soon.IMO.