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: Quote, Profile, Research) 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 , 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: Quote, Profile, Research), the world's No.1 appliance maker, and Sweden's Electrolux (ELUXb.ST: Quote, Profile, Research).

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.