Chinese Strike Fisher & Paykel While Iron Is Hot

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Haier’s takeover of appliance giant looks likely after a formal offer of NZ$1.20 per share is made and the main shareholder jumps on board.

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The Haier Group is to make a cash offer of NZ$1.20 per share for all of the remaining shares of NZ based Fisher & Paykel Appliances it does not already own, confirming it issued the company with a Takeover Notice, yesterday.

The Chinese white goods company’s New Zealand subsidiary also said it will make a formal offer within 14-30 days and confirmed Fisher & Paykel will remain a stand-alone company led by local management.

Haier already has a 20% stake in the NZ based appliance giant, which also controls the Australian operation.

The proposed offer price represents a 60% premium to F&P share price as at close of trading on Friday 7 September, prior to the takeover bid going public.

F&P announced the takeover bid earlier this week and now it appears to have the backing of its Independent directors, who will provide support with conditions, Haier confrimed.

It also has F&P’s largest shareholder Allan Gray, who owns a 17.46 % stake, in “an irrevocable agreement” to accept the offer.

This represents a “strong endorsement of the value” of the offer price, Haier said in a statement today. 

The offer represents “excellent value for shareholders and will be well received by them,” said Mr Liang Haishan, President of Haier White Goods.

Liang also believes shareholders will be pleased with the “significant premium” given the economic uncertainty hanging over the market at present.

“We believe the opportunity to receive cash and realise a significant premium over the current share price is attractive for Fisher & Paykel Appliances’ shareholders, particularly given market volatility, recent economic uncertainty and the competitive nature of the global white goods sector,” Mr Liang said.

Haier also confirmed it will retain the existing ratio of New Zealand or Australian resident independent directors on F&P’s board for at least two years.

“We want the Fisher & Paykel Appliances brand to stay and we will support its growth as a global premium brand, with the additional advantages of operating within the Haier Group,” Liang said.

 

Fisher and Paykel said earlier this week no action would be taken until the Board assessed Haier’s offer, including an independent adviser’s report.

However, the Independent Board is supportive of Haier’s offer, subject to the offer price being within or above the independent adviser’s valuation range, and there being no superior alternative, and the terms and conditions are acceptable.

In a five year strategic review revealed this week, the company said it remains “acutely aware” of the potential for economic conditions to change suddenly in key markets, especially in Australia and the USA.

Haier has been in the Australian market since 2004 but are relative newcomers to New Zealand, entering the market there three years ago. 

UBS AG are acting as financial advisors in the takeover bid.

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