The world's largest whitegoods manufacturer, Haier Group, has announced it will bid NZ$1.20 per share in cash for the 80% of Fisher and Paykel Appliances shares it does not already own.
Haier said Fisher and Paykel Appliances' (FPA) independent directors supported the bid, as long as it was within or above the independent advisers' valuation range and as long as there was not a higher bid.
Haier, which rescued New Zealand's major whitegoods manufacturer from bankruptcy in 2009 by buying a 20% stake in the company, said it planned to retain Fisher and Paykel's premium brand, its New Zealand local management and its New Zealand development base. It said a Haier-owned Fisher and Paykel would create more opportunities for employees over time. It made no comment about job losses or the future of Fisher and Paykel Finance or its manufacturing operations.
“We want the Fisher & Paykel Appliances brand to stay and we will support its growth as a global premium brand, with the additional advantages of operating within the Haier Group,” said Liang Haishan, Director of Haier and President of Haier White Goods Group.
“We also wish to retain the existing Fisher & Paykel Appliances development base in New Zealand and to support the future growth of Fisher & Paykel Appliances’ product development capabilities," Liang said.
Haier also valued the quality of Fisher & Paykel Appliances’ management and employees, he said.
“Should our proposed offer be successful, we wish to retain their technical and operational expertise and business development capabilities. We think the opportunities for Fisher & Paykel Appliances’ employees will increase over time as a result of our greater involvement.”
Haier's bid of NZ$1.20/share is 60% above the price on Friday before it was announced Haier was about to approach shareholders with a bid.
“We believe our proposed offer for Fisher & Paykel Appliances represents excellent value for shareholders and will be well received by them,” Liang said, adding the bid was 91% above the volume weighted average trading price over the three month period up to and including Friday.
“We believe the opportunity to receive cash and realise a significant premium over the current share price is attractive for Fisher & Paykel Appliances’ shareholders, particularly given market volatility, recent economic uncertainty and the competitive nature of the global white goods sector,” Liang said.
Haier said Allan Gray Australia Pty Ltd, which is the largest shareholder after Haier and holds 17.46% of Fisher & Paykel Appliances shares, had agreed to accept the bid of NZ$1.20/share.
The proposed offer is subject to a minimum acceptance condition that Haier holds more than 50% of the Fisher & Paykel Appliances shares. After Allan Gray's acceptance, it will own 37.46% at a minimum.
Liang said Haier had "great respect for Fisher & Paykel Appliances’ history, achievements and organisational culture.
Haier said it saw Fisher & Paykel Appliances remaining as a stand-alone company led by local management. "It supports the direction of Fisher & Paykel Appliances’ current business strategy. The transaction will also help facilitate a closer partnership between the two companies," it said.
Mr Liang said Haier also values the quality of Fisher & Paykel Appliances’ management and employees.
Haier also proposes that the existing ratio of New Zealand or Australian resident independent directors on the Fisher & Paykel Appliances board be maintained for at least two years.
UBS AG has been retained as financial advisor and Simpson Grierson and White & Case LLP as legal advisors.