Firm says its bid for Fisher & Paykel Appliances is a 60 per cent premium to Friday's stock price
Chinese home goods maker Haier will offer $1.20 per share for all of the remaining stock in F&P Appliances it does not already own, and says it will keep the Kiwi whiteware as a stand-alone firm should its takeover bid prove successful.
The proposed offer price, issued last night, represents a 15.4 per cent premium to the Kiwi whiteware maker's current share price, which closed up 7c at $1.04 last night.
Haier, which already owns a 20 per cent stake in the New Zealand manufacturer, said the offer was a 60 per cent premium to the company's closing price on Friday.
That was the last trading day before F&P Appliances informed the market on Monday morning of Haier's interest in launching a takeover bid.
Prior to last night's announcement analysts said the Chinese firm would have to make a solid takeover offer in order to get shareholders to sell.
Forsyth Barr analyst Andrew Harvey-Green lifted his discounted cash flow (DCF) valuation on the company's share price to $1.31 on Monday.
"We believe Haier will have to offer something close to our DCF valuation to be successful [in a takeover]," Harvey-Green said.
Haier director Liang Haishan said the company believed the proposed offer represented "excellent value" for shareholders and would be well received.
"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," he said.
Liang said Allan Gray Australia - the largest shareholder in F&P Appliances after Haier, holding 17.46 per cent of the company - had entered an "irrevocable agreement" to accept the offer.
No mention was made of F&P Appliances' other major shareholders - AMP and ACC - in the statement the firm issued last night.
Haier said F&P Appliances' board was supportive of the offer, provided the price was within or above the independent adviser's valuation range, there being no superior alternative for shareholders, and the terms and conditions being acceptable.
"The proposed offer will be subject to general conditions, including regulatory conditions and a minimum acceptance condition that Haier holds more than 50 per cent of the Fisher & Paykel Appliances shares," Haier said.
Should the offer be accepted, Liang said, F&P Appliances would remain a stand-alone company led by local management.
"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," he said. "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 valued the quality of F&P Appliances' employees.
"Should our proposed offer be successful, we wish to retain their technical and operational expertise and business development capabilities," he said.
"We think the opportunities for Fisher & Paykel Appliances' employees will increase over time as a result of our greater involvement."
Haier said it expected to despatch the offer document within 14 to 30 days.