Haier looks likely to succeed in its takeover bid for Fisher & Paykel Appliances after lifting its offer for the Kiwi whiteware maker, according to an institutional investor.
The Chinese firm yesterday announced it would raise its offer by 8 cents to $1.28 per share, a level that comes in at the bottom of the $1.28 to $1.57 per share value range independent adviser Grant Samuel put on the firm.
The new offer has won favour with institutional shareholders Accident Compensation Corporation, Harbour Asset Management and AMP Capital, who have all agreed to sell the 14.1 per cent of F&P Appliances they collectively hold.
Haier paid about 80c a share for its existing 20 per cent stake in 2009 as part of make-or-break capital raising by F&P Appliances to stave off a potential debt default.
Haier has already secured an agreement with Australian fund manager Allan Gray to buy its 17.46 per cent stake, and now has control of 51.56 per cent of F&P Appliances' shares.
Haier's offer was conditional on getting over 50 per cent, although it would prefer a full takeover.
"Our view is this price should enable Haier to get 100 per cent of the company and we think it is very fair from a shareholder's point of view," said John Phipps, deputy head of New Zealand equities at AMP Capital.
The $1.28 offer represents a 71 per cent premium on the level F&P Appliances' shares were trading at before the offer was launched. The last time the shares traded at this level was in August 2008, having dropped from about $3.40 in 2006.
"Based on ACC's internal view of value and its own investment processes, we felt the $1.28 share price was fair," an ACC spokesperson said.
The revised offer has also been endorsed by the independent members of the F&P Appliances board, who had previously urged shareholders to reject a $1.20 offer.
Chairman Keith Turner and directors Philip Lough, Lynley Marshall and Bill Roest, said they had considered the full range of expert advice and considered $1.28 to be fair value.
Turner also said directors and senior staff members who own shares in the company would be selling them into the deal.
The offer closes on November 6.
Shares in F&P Appliances rose 2.4 per cent yesterday to $1.265.
- The Dominion Post
How excited are you about the 2014 Commonwealth Games?Related story: After the hype, time to let the Games begin