Tower says F&P Appliances offer too low

TIM HUNTER
Last updated 14:39 14/09/2012
sam stubbs
A STEAL: Tower Investments ceo Sam Stubbs says Haier's $1.20 a share takeover offer for F&P Appliances is too low.

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Fund manager Tower has come out fighting against a takeover proposal for whiteware maker Fisher & Paykel, describing it as "a steal".

Sam Stubbs, CEO of Tower Investments, said Chinese giant Haier's proposed offer of $1.20 a share is far too low and shareholders should be looking for at least $1.50.

After visiting Fisher & Paykel's Auckland facility today, Stubbs said it was clear Haier's takeover significantly undervalued the company.

"I tell you what I'm all rarked up about this," he told BusinessDay. "I feel very passionately this would be a steal at $1.20."

Fisher & Paykel, a global manufacturer known for its technology and innovation, is was one of the few New Zealand companies with research and development in its corporate DNA, he said.

"They genuinely are the best in the world at what they do."

Haier, a 20 per cent shareholder since 2009, was well aware of what F&P's technology could do for its large scale operation, and local investors had been slow to recognise its real value.

"What management have done over the last couple of years is commercialise technology they've been developing over a long period, but there's a whole lot more in the pipeline," said Stubbs.

"Local owners of the stock fall into what I call a 'TradeMe mentality', they view TradeMe in the context of other companies on the New Zealand stock exchange. To our mind that's completely irrelevant. You've got to view this company as a global R&D company. What would you be paying to apply that to whiteware sitting in almost every home in the world?"

Stubbs said Tower's 3.7 per cent stake in Fisher & Paykel Appliances was its biggest single position and had been acquired at 35c to 50c a share.

"Are we talking our own book here? We certainly are, but I'm emotional about this. It's an iconic company. If we lose the opportunity to invest in this forever, we should be paid a premium for that."

Fisher & Paykel shares were steady today at $1.18, valuing the company at $854 million.

Grant Samuel is preparing an independent report on the takeover offer.

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- BusinessDay.co.nz

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