WELLINGTON -- One of New Zealand's oldest and most reputable whiteware makers looked set Thursday to slip into Chinese ownership after the directors advised shareholders to accept a takeover offer from Chinese giant Haier.
The independent directors of Fisher & Paykel Appliances Holdings Ltd, or FPA, unanimously recommended shareholders accept Haier's offer, which was raised from the NZ$1.20 (99 US cents) a share on the table last month to NZ$1.28 Thursday.
FPA chairman Keith Turner said the independent directors had carefully considered a full range of expert advice, including an independent adviser's report and regarded the increased offer as representing fair value.
"We also note that the increased offer is within the independent adviser's valuation range of NZ$1.28 to NZ$1.57 per share," Turner said in a statement.
Major shareholders, representing approximately 14.1 percent of the stock, had also committed to accept the new offer, in addition to Allan Gray Australia, wich had accepted the previous offer in respect of its 17.5 percent shareholding.
"This means that with Haier's existing 20 percent shareholding, Haier will achieve its minimum acceptance condition of more than 50 percent of the voting rights of FPA and will gain a controlling interest in the company when the offer becomes unconditional," said Turner.
Directors acknowledged that the share price was likely to drop below the offer price if Haier failed to gain a 90 percent acceptance rate.
FPA shareholders have until Nov 6 to accept the increased offer from Haier.
The recommendation followed an announcement from Haier New Zealand Investment Holding Co Ltd that the Accident Compensation Corporation has confirmed it would accept the new offer for its 7. 2 percent shareholding, as had AMP Capital Investors and Harbour Asset Management, which held 4.5 percent and 2.4 percent shareholdings respectively.
Liang Haishan, chairman of Haier New Zealand Investment and president of Haier White Goods Group, said it was important for Haier to proceed with the independent board's full support.
The new offer price would represent a 71 percent premium to the pre-offer price of FPA shares, Liang said in a statement.
Earlier this month, the independent directors unanimously recommended that shareholders turn down the previous offer on the grounds that it did not adequately reflect their view of the firm' s value based on their confidence in its strategic direction.
The takeover looked set to stir a controversy over the loss of New Zealand assets similar to the sale of the 16 Crafar dairy farms to China's Shanghai Pengxin group.
Economic development spokesperson for the main opposition Labour Party David Cunliffe said Fisher and Paykel was a New Zealand "innovation icon".
"The threat of an overseas takeover of Fisher & Paykel is now very real and the likelihood of excellent skilled jobs going overseas is worryingly high," Cunliffe said in a statement.
"If Fisher & Paykel is sold it will be the latest in a long line of sell-offs, which has seen over 30 high-tech companies go offshore in the past decade. That means a lot of quality, skilled jobs are disappearing."
Haier acquired 20 percent of Fisher and Paykel Appliances in 2009, establishing cooperation agreements in research and development, sourcing, manufacturing and marketing.
Fisher & Paykel Appliances Holdings, the parent company of Fisher & Paykel Appliances and Fisher and Paykel Finance, is listed on the New Zealand and Australian stock exchanges and employs more than 3,300 staff worldwide.
Established in New Zealand in 1934 and first listed in 1979, the company has manufacturing plants in New Zealand, Italy, Thailand and Mexico.