UPDATE 1-NZ's F&P Appliances says to retain finance arm

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WELLINGTON, March 27 (Reuters) - New Zealand household appliance maker Fisher & Paykel Appliances Ltd (FPA.NZ: Quote, Profile, Research, Stock Buzz) said it would retain its consumer finance arm because offers for the business were too low, sending its shares to a five-year low.

Last November, the company invited bids for the operation after it said it had received strong expressions of interest.

However, it said on Thursday that offers did not exceed the company's internal valuation and it would hold on to the business.

"We are comfortable retaining this business and it is very much business as usual," said chief executive John Bongard in a statement.

Shares in Fisher and Paykel Appliances, a top-10 stock, were down 3.4 percent, or 8 cents, at NZ$2.30 by 0054 GMT, matching five-and-a-half year lows hit on Tuesday.

Bongard said the finance arm was performing well and had strong growth prospects in a sector which is consolidating after recent company failures.

Last month, the company said revenue for the first 10 months of its financial year was up 2.2 percent on a year earlier on higher prices and increased market share.

Fisher & Paykel Appliances makes kitchen and laundry appliances, but has been moving manufacturing operations to Thailand and the United States from New Zealand and Australia to cut costs and get closer to key markets.