Haier's higher offer accepted

Haier takes control of Fisher and Paykel Appliances with increased NZ$1.28 per share takeover offer accepted by independent directors

18th Oct 12, 2:30pm by Gareth Vaughan

Fisher & Paykel Appliances' independent directors says shareholders should accept an increased takeover offer from China's Haier, which through acceptance from some institutional investors, now has more than 50% of F&P Appliances' shares.

Haier has increased its offer to NZ$1.28 per share from its initial offer of NZ$1.20 per share. The NZ$1.28 price is at the bottom of the NZ$1.28 to NZ$1.57 per share valuation range in Grant Samuel's independent report on the Haier offer.

Major shareholders, including AMP Capital Investors, the Accident Compensation Corporation and Harbour Asset Management, representing about 14.1%, have now committed to accepting the NZ$1.28 per share offer from Haier. This is in addition to Haier, which started as a 20% shareholder itself, previously getting support from second largest F&P Appliances shareholder, Allan Gray, for its 17.5%. Haier now holds 51.95% of the New Zealand company.

“This means that with Haier’s existing 20% shareholding, Haier will achieve its minimum acceptance condition of more than 50% of the voting rights of F&P Appliances and will gain a controlling interest in the company when the offer becomes unconditional," chairman Keith Turner said.

“Directors acknowledge that some market commentators believe that should Haier’s offer close without Haier having reached 90% acceptances, F&P Appliances shares will trade lower than the increased offer price of NZ$1.28.”

Turner said shareholders should consider Haier’s increased offer in the context of their own circumstances and should consult their professional advisors.

Directors and senior F&P Appliances officers who hold shares will accept the increased offer. Shareholders have until November 6 to accept the increased offer, unless Haier extends it.

Haier has previously suggested it might sell whiteware maker F&P Appliances' consumer finance business, F&P Finance, should it gain control of F&P Appliances, which it has now done.

The independent directors are Turner, Philip Lough, Lynley Marshall and Bill Roest.

Meanwhile, Liang Haishan, chairman of Haier New Zealand Investment Holding Company and president of Haier White Goods Group, said the support of the independent directors for Haier's increased offer was "very valuable" and it was important for Haier to proceed with their full support.

“While we differ with the valuation provided by the Independent Adviser, we are pleased to indicate our intention to provide an increased offer price to within the valuation range. We feel this allows our offer to move forward on a positive basis," said Liang.

At NZ$1.28 per share, the offer represents a 71% premium to F&P Appliances' pre-offer share price.

The offer remains subject to certain regulatory approvals, including from the Overseas Investment Office.

(Update adds comments from Haier).

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12 Comments

by SmoKey | 18th Oct 12, 3:08pm 1350526121

I smell a deal, without any ordinary shareholders' participation..the big boys have sewn it up.

by Rob | 18th Oct 12, 4:21pm 1350530486

Goodby F&P and one of NZs iconic brands.They got it for a very good deal, especially considering the share price before the GFC. The fact that this news doesn't make it to the front page of the mainstream media tells you something.

by Gummy Bear Hero | 19th Oct 12, 10:14am 1350594882

..... it tells you that Kiwis only support an iconic local brand after it is too late !

The money needed to keep F&P Appliances in Kiwi control is a pittance compared to the fortune piled into Auckland residential real estate , and into finance companies pre-GFC ...

..... there's no shortage of KiwiSaver funds , or even the Cullen fund , which could have taken a blocking stake in F&P Apps , but didn't ......

Was the company as good as you think , or are other investments so much better by comparison ?

by Crooked Thumb | 18th Oct 12, 10:48pm 1350553705

Our experience with Haier Appliances (the firm, and their products) a few years ago does not lead me to believe that people buying F&P appliances in years to come will be buying quality or dealing with a company with integrity. We took them to the Disputes Tribunal, they chose not to appear, and we had to set bailiffs on to them before they would respond to the judgement. A right bunch of charmers!

by Rudderless | 19th Oct 12, 8:15am 1350587750

What a great shame for all of NZ.

How many here remember the days when F & P made all of New Zealands Champion spark plugs. And what about their amazing WW2 manufacturing contribution.

But the bright side is - we still own those old moss-encrusted dams. Are there any takers?

I am all good though. I still own my mothballed factory. And last night I hit the Jim Beam - with Coke emblazoned with X Factor goons names. It still did the stupefying job quite nicely!

Roll on the new age of 'Serfdom'.

by goNZ | 19th Oct 12, 9:24am 1350591853

Haere Ra o F&P - another chink has been exploited in NZs economic armour

by Christov | 19th Oct 12, 10:28am 1350595713

Gonzo ..you naughty man..! but loved the freudian slip.

by Jack | 19th Oct 12, 11:26am 1350599206

What a great shame --- the manufacturing plants had to be shifted off-shore to remain compeditive and the GFC came along while this re-configuration was being done--and caught FPA short of cash --- Haier came in and bought a 20% shareholding, and saved FPA.

But FPA's previous management made bad mistakes --- these were recovered with the new CEO in the last 2 years --- Not Keith Turner .

The new CEO must be pissed that these Chinese have made an opportunistic buy, just when he had the company turning around.

But us Kiwi's, we have not lost the Intell -- to create-- things like the Unique Smart Drive Motor --- the Dish Drawer --- the new Refrigerant Pump for Fridges---- Haier will love getting hold of that. FPA's R&D staff have taken several years to bring this Refrigerant Pump to fruition. World leading -- no one else has done it. Haier wil have a Fridge advantage over every othe Fridge manufacturer in the world --unless they license the Invention to other Fridge makers.

NZ has lost --- Auckland will lose more jobs --- a Business that has taken many years to build up -- sold in the wink of an eye. NZ's could have invested in FPA --- but no they went for the shonky Finance Companies and lost big dollops of money.!!!! Justice !!!!

NZ has lost because many Kiwi's (or Investors) --have not got the thinking mode --- to be a Controlling Company --here in NZ --and make money out of products made and sold in the rest of the world to our design and manufacturing expertise.

by Rudderless | 19th Oct 12, 11:37am 1350599826

Thank you Jack. You have said exactly what I was trying to convey myself. But without your knowledge. Tell us more about that compressor.

by Jack | 19th Oct 12, 1:53pm 1350608016

To Rudderless-- re the new Refrigerant Compressor.

I don't know that much about it, but its been notified in the FPA --Annual Report --and I think one other news item. It had to be actually proved --in service --- for quite some time to make absolutely sure it worked as intended.

Then Manufacturing techniques (production line) would have to be worked out -- and costings done to determine manufacturing cost.

FPA would have had the expensive costs of Patenting the new pump, through-out the world. Otherwise ---you know who ---would just copy it after they bought their first new Fridge with the new pump--and in light speed would dissect it.

Not too much could be revealed by FPA ---[ but Haier's directors after they bought the first 20% of shares would know something about it ] for obvious reason's while FPA was getting patent.

I believe a key attribute of this new Refrierant Pump --is that it saves quite a bit of electrical energy.

It does show the value of Research and Development funding, by our best companies.

Small companies can be good too -- but either way its easier to fund/live (pay the bills) if you are a larger company with good turnover ( more coin).

by waymad | 19th Oct 12, 11:44am 1350600297

Brushless/stepper motors (what the Smart Drive is) are a dime a dozen, and F&P relied too long on that one piece of IP.

As a former user of their appliances, I know all too well the failures at the actual delivery and long-term reliability end.

Like Sanitarium is doing right now (pursuing some hapless importer of a pallet of Ma'amite for passing-off or a similar hanging offence), F&P managed to poison their brand locally.

And the consumer who simply says (to themselves and no-one else) 'I am NEVER gonna buy that brand again' is by definition unknown to all the clever xRM systems out there.

The dog that Didn't bark - cannot be Heard!

by robby217 | 19th Oct 12, 9:06pm 1350633985

Mmm should of stayed private. The benefits of public listing seem to diminish by the day especially if you're not a huge player.

Nevertheless will be interesting to see what happens long-term with the brand and R&D etc.