It has come to light over the past couple of weeks that the bid made by Haier to buy the rest of Fisher & Paykel may well have hit a bump in the road that could well prevent the Chinese company from gaining control of the New Zealand appliance manufacturer.
It started a week or so ago when the share price of Fisher & Paykel rose above the offer that Haier had made of $1.20 NZD per share to $1.25 NZD and then creeping up although, at the time, analysts expected the Fisher & Paykel shares to top out at best around the $1.45 – $1.57 NZD mark. This would have significantly increased the cost to Haier to acquire the business.
It appears that off the back of this that Fisher & Paykel directors decided to reject the offer from Haier on the ground that the bid from Haier was too low and undervalued the company.
In response, Liang Haishan, chairman of Haier New Zealand Investment Holding and president of Haier White Goods Group, said that, “As we have already indicated, we think shareholders need to decide between the certainty of our offer or the optimistic projections of the Independent Adviser’s Report,”. Essentially urging Fisher & Paykel shareholders to ignore the recommendations of the independent directors of the company and accept the bid.
On October 9th Haier received the green light for the takeover from the US anti-trust authorities which Haier had stated was a pre-requisite of it buying Fisher & Paykel.
Then yesterday it came to our attention that Haier had taken another swipe at the valuation even going so far as to issue a document to shareholders urging them to accept the bid from the Chinese company. Again, reinforcing the message that their bid is the good and that the various higher valuations are “overly optimistic”.
In this seeming increasingly bitter wrangle over the New Zealand manufacturer Deutsche Bank has weighed in this morning with its own opinion saying, that Haier may well need Fisher & Paykel more than the New Zealand manufacturer needs Haier, but that doesn’t mean rejecting the takeover offer is the best option for shareholders.
Deutsche says in a note that if Haier becomes a majority shareholder but fails with a complete takeover bid, it could be to the detriment of other Fisher & Paykel shareholders.
One thing is for sure though, the war of words will probably continue until the point at which the offer from Haier expires, 6th November.