By Claire Reilly
Haier has come out swinging following the release of an independent report by Fisher & Paykel Appliances which states the company’s takeover bid for FPA is undervalued.
The report, compiled by advisers Grant Samuel, noted that “the Haier offer of $1.20 per share is below Grant Samuel’s assessed value range for FPA shares” which it set between $1.28 and $1.57 per share. As a result of this report, FPA’s directors have recommended that shareholders “do not accept” the Haier offer.
In response, Haier has issued a foreboding warning to shareholders, saying that its “cash offer provides certainty to shareholders” while the independent adviser’s valuation is “overly optimistic”.
“Haier Group says Fisher & Paykel Appliances Holdings Ltd (Fisher & Paykel Appliances) shareholders will need to decide between the certainty of Haier's offer or taking a significant risk on the achievability of the Independent Adviser’s valuation range.”
The Chinese company outlined that its offer price represented a 60 per cent premium to the FPA share price as it was trading the day before the offer was made, and a 91 per cent premium to the average price in the three months prior to the offer.
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The president of Haier White Goods Group, Liang Haishan, also cast doubt over the likelihood of FPA achieving the goals it set out in its five-year strategic plan, which was released to shareholders last month, after the offer was made.
“There is a high degree of risk regarding the implementation of the five year strategic plan and achievement of the goals set out in it,” said Haishan.
“In determining the offer price we have applied our significant, first-hand knowledge of Fisher & Paykel Appliances and the highly competitive global white goods sector, together with a consideration of the economic environments Fisher & Paykel Appliances operates in.”
“Haier continues to believe its offer represents excellent value for shareholders”
“If the offer is successful, shareholders will receive a certain cash payment. In contrast, Haier believes there are significant risks in the achievability of the Independent Adviser's valuation range announced today.”
Haishan also reiterated the veiled threat made last week that, should shareholders reject the offer, there was “likely to be a large decline” in FPA’s current share price.