Independent directors of Fisher & Paykel Appliances have recommended that shareholders do not accept a takeover offer from Haier.
The Chinese whiteware firm has a cornerstone 20% stake in the New Zealand company and has offered $1.20 per share, saying the figure is a significant premium to the value of the stock before the takeover was indicated.
But four independent directors say that figure does not adequately reflect the value of Fisher & Paykel Appliances' stock.
Director Bill Roest says they are following the advice given in an independent report, which puts a greater value on the company than what Haier is offering and are obliged to follow it.
The report's valuation range is between $1.28 to $1.57 per share.
Mr Roest says the directors have confidence in the Fisher and Paykel's direction and shareholders should have confidence in its five-year strategic plan which includes innovative products and expanding markets in India, China and North America.
Financial adviser Bryan Gaynor says the opposition from the directors is not nationalistic pride, but common business practice, and they would be wrong to ignore the report's valuation range.
Mr Gaynor believes there is a better than 50-50 chance that Haier will come back with a better offer.
Shares in Fisher & Paykel Appliances were up 4.5 cents to close at $1.25 on Thursday.
Haier urges shareholders to take advantage
Haier is urging shareholders to take advantage of the certainty of its offer and not hold out for a higher price that might not come through.
Haier insists that $1.20 represents excellent value, being 60% above the level before its offer became public.
The company argues the subsequent rise in the share price stems from reaction to that takeover offer and adds the higher value of the independent report is based on a five-year strategic plan which carries risks.
If the offer is unsuccessful, Haier says it is likely that the share price will decline significantly.
But Sam Stubbs, chief executive of Tower Investment which holds a 3.7% stake in Fisher & Paykel Appliances, says the independent adviser's assessment is spot on.