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Haier sweetens bid for F and P Appliances to bottom end of range

Thursday 18th October 2012

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Chinese whiteware maker Haier has pushed its bid Fisher & Paykel Appliances to $1.28 a share, the bottom end of the independent valuation range, gaining crucial support from institutional investors to meet its 50 percent minimum acceptance threshold.

Haier raised its bid 8 cents a share, bringing it within the independent valuation of between $1.28 and $1.57, it said in a statement.

The increased offer has won the approval of Accident Compensation Corp, AMP Capital Investors and Harbour Asset Management, giving the Chinese firm more than 50 percent of F&P Appliances and meeting its minimum acceptance condition. Haier had already secured agreement form Allan Gray Australia, with a 17.5 percent shareholding.

The shares rose 2.8 percent to $1.27 immediately after the shares came off a trading halt, indicating investors don't see another bidder coming to the party. The increased offer represents a 71 percent premium over F&P Appliances' stock price of 75 cents, before Haier disclosed its interest.

"While we differ with the valuation provided by the independent adviser, we are pleased to indicate our intention to provide an increased offer price to within the valuation range," said Liang Haishan, Haier New Zealand Investment Holding chairman. "We feel this allows our offer to move forward on a positive basis."

The increased offer got the thumbs up from F&P Appliance's independent directors Keith Turner, Philip Lough, Lynley Marshall and Bill Roest, who changed their recommendation in favour of the deal. They had previously told shareholders to reject the offer at $1.20 a share.

Shareholders have until Nov. 6 to accept the increased offer.

Haier effectively rescued F&P Appliances in 2009 when it acquired a 20 percent stake as part of a capital raising that let the company refinance its debt. The local manufacturer got distribution into China as a result of the deal and the ability to further licence its technology.

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