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Haier F&P deal not a certainty

CLAIRE ROGERS
Last updated 05:00 05/11/2012

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Haier's bid to own all of Fisher & Paykel Appliances by tomorrow is no sure thing, with analysts either on the fence or betting it won't get the 90 per cent it needs by the deadline.

Shareholders have until 5pm tomorrow to accept Haier's offer of $1.28 a share, unless it is extended.

As of Friday afternoon, Haier said it held 72.37 per cent of FPA's shares. Substantial minority shareholder Tower Investments, which owns 3.7 per cent of FPA and has been critical of Haier's offers, also said on Friday that it would reluctantly sell its stake.

Forsyth Barr research analyst Andrew Harvey-Green said it looked likely Haier would clear 80 per cent, but it was still "a 50-50" call as to whether it would get to 90 per cent, giving it the right to purchase the remaining shares.

"There will be a lot of last-second acceptances. There are always a number of people who wait until the last moment before they accept these sorts of things."

He would not be surprised if Haier extended the deadline. Key management, including Gary Paykel, had accepted the offer.

Investment Partners investment adviser Paul Valk said he did not think Haier would get to 90 per cent by tomorrow.

He also did not think Haier would extend the offer, because an extension would not make a difference to those who had decided to hold out and hope for more money from Haier in return for full control.

He had heard rumours that a bloc of shareholders "were looking to be stubborn".

"You tend to find that people who have reasonable stakes in these companies are pretty experienced investors and generally just have a view that if there's a takeover they'll hold right through to the bitter end. If [Haier] do get to 90 per cent and they end up getting taken out [at $1.28] then so be it."

Haier initially offered FPA shareholders $1.20 a share, but increased that to $1.28, which prompted several institutional investors, including ACC, to sell after independent adviser Grant Samuel valued the company at $1.28 to $1.57 a share.

Tower Investments chief executive Sam Stubbs described Haier's first offer as "a steal" and said it was still disappointed with $1.28, but did not want to end up a substantial minority shareholder in a company controlled by the Chinese whiteware giant.

FPA shares traded flat at $1.275 on Friday, valuing the company at $923.4 million.

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- BusinessDay.co.nz

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