(Repeats to additional subscribers)
* F&P Appliances major shareholder Haier considers takeover
* Haier hopes to boost technology, improve quality -analysts
* Convincing offer would be north of NZ$1.10, NZ$1.15
By Naomi Tajitsu and Donny Kwok
WELLINGTON/HONG KONG, Sept 10 China's Haier
Group, parent of Carlyle-backed Haier Electronics, is
looking at a takeover of New Zealand's Fisher and Paykel
Appliances Ltd, in a deal that could value the
dishwasher and washing machine maker at some $600 million.
The move would beef up Haier's technology and reduce its
reliance on a slowing China economy, while news of the approach
sent shares in New Zealand's largest appliance maker soaring, at
one point as much as 40 percent to a 3-1/2 year high.
Haier, which already owns 20 percent of the company, has
approached three other shareholders about possibly buying their
stakes, F&P's directors said in a statement.
They added that Haier would pay a premium if an offer were
to be made although they did not reveal the price the Chinese
company had indicated.
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
"It's a smart move to eye overseas expansion so as to reduce
reliance on slower demand in the domestic market," said Linus
Yip, chief strategist at First Shanghai Securities.
Brian Gaynor, director of Milford Asset Management, said
Haier, one of the world's largest appliance makers, would have
to offer more than NZ$1.00 per share to show it was serious
about a takeover.
"Whether the takeover goes through will depend on the price.
It will have to be north of NZ$1.10, NZ$1.15," he said.
F&P's shares were last trading 29 percent higher at NZ$0.97,
valuing the company at around $600 million. The stock rose as
high as NZ$1.05 on Monday.
The three shareholders Haier approached are Australia's
Allan Gray, formerly called Orbis Investment Mangement, which
owns around 17 percent, AMP Capital Investors which holds about
5 percent, and the state-owned Accident Compensation Corp has
about 8 percent.
Simon Marais, managing director of Allan Gray, said the
company had been in talks with Haier but declined to give
details. AMP and Accident Compensation Corp declined to comment.
Officials from Haier Group or its units, Hong Kong-listed
Haier Electronics and Qingdao Haier Co Ltd, were not
immediately available for comment. Haier Electronics' Hong
Kong-listed shares were flat.
A GOOD FIT
F&P, known for its double-door dishwashers, had been hit by
the global credit crisis as slower demand was aggravated by a
high New Zealand dollar, but analysts said the company had
turned a corner in the past year and has a solid outlook.
"Fisher and Paykel would be an ideal company for (Haier) to
stitch on to their existing operations and use their
technology," said Gaynor.
Although some Chinese firms have had difficulties buying
into overseas assets, there have been precedents set in New
Zealand, with Bright Dairy owning 51 percent of
dairy producer Synlait and a takeover approach from Haier was
not expected to ruffle feathers.
"Haier have been on the register for quite some time. If
there was any issue, I'm sure it would have been borne out a
long time before now. I would say there would be no issue
whatsoever," said David Price, head of institutional broking at
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.
Haier Group bought a 20 percent stake in F&P in 2009, giving
it exclusive rights to sell F&P products in China. Two years
later, Carlyle Group agreed to buy 9 percent of Haier's Hong
Kong-listed unit, investing up to $194 million through
Carlyle's investment provided capital for Haier's expansion
plans, and emerged just days after Haier decided to buy
Panasonic Corp's Sanyo Electric washing machine and
refrigerator units in Japan and Southeast Asia for $130 million.
Last month, F&P announced a surge in net profits for the
first four months of the year and said it would resume dividend
payments this year.
It expects full year operations earnings of NZ$70
million-NZ$78 million before taxes for the current year.
F&P has moved most of its manufacturing to low cost Mexico
and Thailand. It also has a consumer finance business.
($1 = 1.2337 New Zealand dollars)
(Additional reporting by Stephen Aldred and Denny Thomas;
Editing by Anne Marie Roantree and Edwina Gibbs)