China's Haier offers $705 million for Fisher and Paykel

(Reuters) - Fisher and Paykel Appliances Ltd FPA.NZ said Haier Group offered NZ$869 million ($705 million) to buy the kitchen and appliance maker in a deal that would give the Chinese white-goods company full control of its New Zealand partner.

The New Zealand deal is seen as helping Haier reduce its reliance on a slowing Chinese economy and as a tempting offer for F&P's shareholders at a time when demand is slowing for its products.

F&P disclosed on Monday that Haier had approached certain shareholders about purchasing their stakes, although the company did not disclose the price or further details. Haier, parent of Qingdao Haier Co Ltd (600690.SS) and Haier Electronics Group Co Ltd (1169.HK), already owns 20 percent of F&P.

The Chinese company has offered to pay NZ$1.20 ($0.97) a share in cash for a full takeover, F&P said on Tuesday, a 15.4 percent premium to its closing price. Fisher and Paykel also said the offer has the support of fund manager Allan Gray, which owns 17.5 percent of the company.

Haier's first overseas foray was a failed attempt in 2005 to buy U.S. white-goods maker Maytag after teaming up with Bain Capital and Blackstone Group LP (BX.N).

Washington D.C.-based Carlyle Group LP (CG.O) agreed in 2011 to buy 9 percent of Haier's Hong Kong-listed unit, investing up to $194 million through convertible bonds. Carlyle's investment provided capital for Haier's expansion plans and emerged just days after Haier decided to buy Panasonic Corp's (6752.T) Sanyo Electric washing machine and refrigerator units in Japan and Southeast Asia for $130 million.

F&P, known for its double-door dishwashers, had been hit by the global credit crisis and slow demand aggravated by a high New Zealand dollar. Some analysts said the company had turned a corner in the past year and faced a strong outlook. F&P has moved most of its manufacturing to low-cost Mexico and Thailand. It also has a consumer finance business.

Shares of F&P ended 7.2 percent up on Tuesday, outpacing a 0.18 percent slid in benchmark S&P/ASX 200 index .AXJO.

The news comes as China's home appliance makers are grappling not only with reduced demand, but also intensifying competition from local and foreign brands that have hurt their bottom lines and prompted them to seek new avenues to spur growth.

Although some Chinese firms have had difficulties buying into overseas assets, there have been precedents set in New Zealand, with Bright Dairy (600597.SS) owning 51 percent of dairy producer Synlait and a takeover by Haier was not expected to ruffle regulatory feathers.

Outbound China deals so far this year amount to $42.6 billion, down from $57.7 billion in the same period a year earlier, according to Thomson Reuters data.

($1 = 1.2324 New Zealand dollars)

(Additional reporting by Narayanan Somasundaram; Editing by Michael Flaherty and Matt Driskill)