China's Haier makes Fisher & Paykel takeover bid
WELLINGTON, New Zealand (AP) — Chinese home appliance giant Haier Group has launched a $704 million takeover bid for New Zealand's Fisher & Paykel Appliances.
Haier, which already owns 20 percent of Fisher & Paykel, is offering NZ$1.20 per share for the remaining 80 percent of the company. The cash offer values the company at NZ$869 million ($704 million).
The offer was announced after the New Zealand stock market finished trading Tuesday and just a day after Fisher & Paykel had first said that Haier was planning to a takeover bid. Shares in Fisher & Paykel ended Tuesday at NZ$1.04, up 39 percent from their close Friday. Haier's offer represents a 60 percent premium to Friday's closing price.
The takeover is contingent on Haier gaining a controlling 50 percent stake and clearing regulatory hurdles. Liang Haishan, a director of Haier's New Zealand branch, said in a statement that Haier had reached a lock-up agreement with Allan Gray Australia Ltd, the next largest shareholder after Haier, for its 17.46 percent stake. That leaves Haier less than 13 percent short of a controlling stake.
"We believe the opportunity to receive cash and realize 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.
For New Zealanders, the takeover is likely to be mourned as the loss of control of a homegrown brand that began 78 years ago and grew to represent a rare manufacturing success story. The company's stoves, refrigerators, washing machines and dishwashers became ubiquitous in New Zealand homes, while innovations such as its dish drawer dishwasher found a niche in the United States. But the company struggled in recent years against tough market conditions and a high New Zealand dollar. Haier helped rescue Fisher & Paykel by investing in it after the 2008 global financial crisis.
Liang said Haier has great respect for Fisher & Paykel's history, achievements and management and plans to keep the brand as well the company's development base in New Zealand.
Fisher & Paykel chairman Keith Turner said Tuesday the board was supportive of the offer but was making no recommendation to shareholders pending an independent valuation of the company and the absence of any other better offers.
Turner said the relationship between the two companies had grown since Haier had taken its 20 percent stake. He said Fisher & Paykel began marketing Haier products two years ago and Haier began using Fisher & Paykel washing machine engines in its products.
Fisher & Paykel employs about 3,400 people worldwide, including 1,100 in New Zealand, and manufactures about 1.5 million appliances each year.
Haier employs 80,000 people and has annual revenue of more than $23 billion.