Haier offer a steal, says Tower

Workers make driers at one of Fisher and Paykel's factories. File photo / Glenn Jeffrey

Fisher & Paykel Appliances, the target of a Chinese takeover bid, is at risk of being sold for "a steal", says a major investor in the Kiwi manufacturer.

China's Haier, which already owns a 20 per cent stake in the New Zealand company, is proposing an offer of $1.20 a share for all the remaining shares in F&P Appliances.

"I would go so far as to say $1.20 is a steal," said Tower's head of investment, Sam Stubbs, whose company manages a 3.68 per cent stake in F&P Appliances.

Shareholders in the East Tamaki-based appliance maker are awaiting an independent valuation of the firm.

Stubbs said the bottom end of that valuation should be at least $1.50 a share, which would value the company at $1.1 billion.

He said F&P Appliances' management had done a great job of turning the business around and the company was on the cusp of realising huge value from its technology.

F&P Appliances already supplies direct-drive washing machine motors to Haier and Whirlpool, and in 2010 the firm unveiled a new refrigerator compressor it claims has the potential to revolutionise the industry.

"And there's further game-changing technology coming down the pipeline," said Stubbs, who paid a visit to F&P Appliances yesterday.

"This is a company that's got R&D in its corporate DNA."

He said New Zealand investors might be comparing F&P Appliances' value to the market valuations of other NZX-listed firms.

"But if you're Haier or Bosch or Whirlpool you're looking at what that technology is worth when you apply it to your global manufacturing and we think that's significantly higher than the ... price that's being offered."

F&P Appliances shares closed down half a cent yesterday at $1.175.

Stubbs said Tower bought its shares when they were trading at between 35c and 50c over the past two years. "It was a brave move at the time, I'll tell you."

F&P Appliances has told its shareholders to wait for the independent adviser's report before taking any action on Haier's proposed offer.