It is reported that Fisher & Paykel Appliances’ Chinese shareholder Haier is considering a full takeover of the New Zealand appliance manufacturer.
Fisher & Paykel (FP) said that Haier had expressed an interest in acquiring the 80% of shares it doesn’t already own in the appliance manufacturer. No specifics on the price being offered were disclosed other than directors saying it would represent “a premium on Fisher & Paykel Appliances’ current share price, if an offer were to be made”.
FP shares leapt 40% on the news but have since dropped back to be 22.7 per cent higher at 95.5 cents each so market reaction to the news appears to be, at least initially, positive on the potential takeover by the Chinese company. FP shares have gained about 56% in the past 12 months.
FP’s directors stressed that no official takeover offer had been received, and that at this stage it had agreed to a limited commercial and financial due diligence process, a precursor to a complete offer.
“We understand they are considering making an offer,” said chairman Keith Turner. “Where they are in respect of that offer is hard to know.”
Haier also notified FP that it would be approaching its three biggest shareholders regarding a possible takeover.
The Chinese company came on board as a shareholder in 2009, buying 58 million shares in FP giving it an approximate 20% stake in the company.
At the time the equity injection and a $200 million capital raising allowed FP to stave off a potential debt default after the global financial crisis forced it to survive on costly short-term debt facilities.
“The company has done a huge amount of work in last two to three years to rebalance and that is starting to show in the results,” Turner said, adding that Haier’s interest reflected this as well as the firm’s technology.
The firm’s board, excluding the two independent directors associated with Haier, has advised shareholders to take no action until further details of the offer are made available.
As is the norm with these sort of announcements, there’s very little chance of there being smoke without a fire.