18 Oct 2012

Haier tightens grip on Fisher and Paykel Appliances

7:30 pm on 18 October 2012

The Chinese whiteware firm Haier looks likely to get the majority stake it's after in Fisher and Paykel Appliances.

Haier, the company's largest shareholder, has increased its offer by 8c to $1.28 a share, which in effect puts the firm's value at $927 million.

The offer has already been accepted by some of Fisher and Paykel Appliances' largest shareholders, giving Haier more than 50% control of the company.

Earlier this month the company's independent directors advised shareholders to reject Haier's initial offer of $1.20 a share, saying it was too low. An appraisal report had put the value of a share at between $1.28 and $1.57.

The board is now advising shareholders to accept the revised offer.

However, the executive director of Milford Asset Management, Brian Gaynor, says the company is worth a lot more than the latest offer and he expects Haier will have to raise its bid again if it wants to gain full control - probably to between $1.35 and $1.40.

Mr Gaynor says if Haier fails to get 90% of the shares, thus forcing compulsory acquisition, it would find it difficult to make and sell F & P products in China without the approval of other shareholders.

Before trading in the company was suspended in anticipation of Haier's announcement, the share price was sitting above Haier's earlier price offer.

On Thursday Fisher and Paykel Appliances' shares closed up 3 cents at $1.26 each on the NZX.

An independent director of Fisher and Paykel Appliances' Bill Roest says the new offer is fair value.

"It puts it into the range of what we consider fair value ... also it puts it within the value range provided by the independent adviser within their report," he says.

"A third point that's important is that three more institutional shareholders have indicated that they will accept the increased offer".