Haier and F&P's conflicting advice to shareholders

In tit-for-tat letters to shareholders, F&P says don't accept Haier's offer while the Chinese company calls an independent valuation of shares "overly optimistic".

Fisher & Paykel Appliances has reiterated shareholders should not accept Haier's takeover offer.

The Chinese whiteware giant is offering $1.20 a share for the 80% of the NZX-listed company it doesn't own.

However, an independent report by Grant Samuel values the shares at between $1.28 and $1.57 and F&P's independent directors have told shareholders not to accept the offer.

Haier New Zealand's chairman Liang Haishan wrote to F&P shareholders this week saying Grant Samuel's valuation is "overly optimistic" and there is a high degree of risk that financial forecasts will not be met.

However, F&P chairman Keith Turner says in a letter, posted on the NZX today, the company's independent directors continue to unanimously recommend shareholders do not accept Haier's offer.

"Fisher & Paykel Appliances is in a strong financial position and, as we said previously, we have confidence in the strategic direction of the company."

Brokers Forsyth Barr said this week the independent report's valuation makes it "all but impossible" for Haier to get to the 90% compulsory acquisition mark at $1.20 a share, which means Haier might be forced to raise its offer if it wants to acquire the whole company.

Haier's offer closes on November 6.

NBR ONLINE revealed this week F&P's finance division, which might be sold if Haier's takeover is successful, says it is negotiating a contract renewal with an unnamed large customer.

Haier bought a 20% stake in F&P in 2009. As part of its takeover, the Chinese company has a lock-up agreement for a further 17.5% of the company with Allan Gray, an Australian fund manager.

F&P shares (NZX: FPA) are down one cent today to $1.22, after starting the year at 36 cents.

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