Haier has made a formal takeover bid for New Zealand whiteware manufacturer Fisher & Paykel Appliances.
The Chinese company, which already has a 20% stake, is offering $1.20 per share, valuing Fisher & Paykel Appliances at $870 million.
Haier sounded out other major shareholders about making a takeover offer during the weekend, sending Fisher & Paykel Appliances shares soaring.
It is willing to pay $695 million for the 80% of Fisher & Paykel that it does not own and has the support of the second largest investor.
Haier, which has 80,00 employees, says Fisher & Paykel would remain as a stand-alone company with local management and employees. It said the offer is desirable, given the subdued demand globally for appliances.
However, Milford Asset Management executive director Brian Gaynor said the offer may not be enough to entice all shareholders and Haier may have to raise its bid.
Haier expects to send the offer to shareholders within 14 to 30 days.
Gary Paykel, who retired from the board after more than 50 years with the company and has a 0.6% shareholding, says he is undecided over whether he will sell or not.
Analysts say Haier wants Fisher & Paykel Appliances because it is well-run and efficient, has innovative products such as its compressor technology and is a well-regarded brand in Europe and the United States.
Fisher & Paykel is recommending shareholders do nothing at this stage. The company says it has already been approached by other parties interested in acquiring certain divisions.
Its share price has risen 13 cents to $1.17 each on Wednesday.