NZ F&P Appliances seen a takeover target-analysts

WELLINGTON, April 8 (Reuters) - A 31 percent fall in the shares of New Zealand household appliance manufacturer Fisher & Paykel Appliances Ltd (FPA.NZ) so far this year could make it a takeover target, Citi said in research report.

Citi is the second broker to put forward the maker of high-end kitchen and laundry appliances as a target, after ABN Amro said last month that at the current share price it would likely come to the attention of prospective buyers.

"Fisher & Paykel's intellectual property library and production know-how must be a tempting target for potential acquirers," Citi analyst Blair Cooper said in a note to clients.

Shares in Fisher & Paykel have lost 31 percent so far this year, compared to a 10 percent fall in the benchmark top 50 index .NZ50, and are the exchange's worst performer in 2008 due to a combination of tighter markets, rising costs and a stronger New Zealand dollar.

The shares last traded down 0.8 percent at NZ$2.35.

Citi said that at its valuation of NZ$453 million ($360 million), Fisher & Paykel would cost less than the annual research and development budgets of its much larger competitors, Whirlpool Corp (WHR.N), the world's No.1 appliance maker, and Sweden's Electrolux (ELUXb.ST).

Both of those companies would benefit from the F&P's premium brand and upcoming product releases.

Citi said it now expects F&P to post a net profit of NZ$62.7 million in the year to March 2008, down 8 percent from its previous forecast but higher than the NZ$55.5 million in a survey of analysts by Reuters Estimates.

Higher raw material costs, lower sales and reduced earnings from its finance arm would all contribute to a lower profit, Cooper said. In 2007, F&P posted a net profit of NZ$61.2 million.

For 2009, Citi cut its profit forecast by 21 percent to NZ$73.6 million.

Fisher & Paykel Appliances 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.

F&P caters to the top end of the market, as opposed to mass-market rivals such as Whirlpool's Maytag, Electrolux and South Korea's LG Electronics (066570.KS). (NZ$1=$1.26) (Reporting by Adrian Bathgate)