Fisher and Paykel Appliances have been approached by Chinese company, Haier, expressing an interest in a takeover of the NZ company. The whiteware manufacturer had a sharemarket value of $540 million at the pre-announcement price of 75 cents.
Fisher and Paykel first started operations in 1934 in the historical Auckland’s Queens Arcade. In 2001 the business was divided into two entities, Healthcare and Appliances, with both having their own separate NZ stock exchange listings. Fisher and Paykel Appliances listed at $1.77 after separation before its shares tumbled to a company low of $0.30 in 2009 (after adjusting for the subsequent capital raising). This is around the time that Haier bought its 20% holding.
However, the company has had a major turnaround which is reflected in its share price increasing by around 50% this year before the Haier announcement.
This expression of interest by Haier has caused a flurry of excitement in the marketplace. However, no price has been announced but New Zealand investors will probably be looking for a bid in the $1.20 to $1.30 range before contemplating acceptance. This price range is realistic because of the widely held belief that the company now faces a much more positive future.
If Haier acquires full control of Fisher and Paykel Appliances, then this iconic company will no longer remain NZ owned although its brand could become a household name in China.
Disclosure of interest: Milford Asset Management holds 14.2 million Fisher & Paykel Appliance shares on behalf of clients.