September 10, 2012 / 1:20 AM / 5 years ago

UPDATE 2-China's Haier sounds out takeover of NZ's F&P Appliances

* 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 -analyst (Adds analyst comment, share price)

By Naomi Tajitsu

WELLINGTON, Sept 10 (Reuters) - China’s Haier Electronics Group Co Ltd is looking at a takeover of New Zealand kitchen and laundry appliance maker Fisher and Paykel Appliances Ltd -- a move that would beef up its technology and help it expand overseas.

Shares in New Zealand’s largest appliance manufacturer surged as much as 40 percent on Monday to a 3-1/2 year high after it said that Haier, which currently owns 20 percent of the company, had approached three other shareholders about possibly buying their stakes.

The shares last traded up 28 percent at NZ$0.96, their highest level since late 2008 and valuing the company at around NZ$688 million ($560 million).

F&P’s directors said in a statement if an offer were to be made, the price “indicated by Haier (which would be subject to conditions) would represent a premium” but did not reveal the indicated price. F&P’s shares had closed at NZ$0.750 on Friday.

Brian Gaynor, director of Milford Asset Management, said Haier, one of the world’s largest appliance manufacturers, 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.

The three shareholders Haier approached are Australia’s Orbis Investment Management, which owns around 17 percent, AMP Capital Investors which holds about 5 percent, and the state-owned Accident Compensation Corp has about 8 percent.

AMP declined to comment. Orbis and Accident Compensation Corp were not immediately available to comment.

Known for its double-door dishwashers and washing machines with advanced technology, F&P Appliances had been hit by the global credit crisis as reduced demand was aggravated by a high New Zealand dollar.

But analysts said the company 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.

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) (Reporting by Naomi Tajitsu; Editing by Lincoln Feast and Edwina Gibbs)

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