TPG tested water but Haier's main rival remains mystery

Business Editor·NZ Herald·

2 Jun, 2009 04:00 PM2 mins to read

US private equity company Texas Pacific Group had a casual look at buying a stake in Fisher & Paykel Appliances but was not the main rival to Chinese manufacturer Haier.

The whiteware maker confirmed last week that Haier would buy a 20 per cent stake through a placement and $189 million capital raising.

Yesterday Haier paid $46 million in cash to secure an initial 16.67 per cent share in Fisher & Paykel. That stake is expected to be increased to 20 per cent through a one-for-one rights issue at 41c a right.

Rights trading began on the Australian securities exchange on Friday and will begin in New Zealand this Friday.

Last week Fisher & Paykel chief executive John Bongard said Haier was not the only party interested in being a cornerstone investor.

But he would not name the other party, only confirming that it was not US appliance manufacturer Whirlpool.

Prime Minister John Key has said he was approached by US private equity firm Texas Pacific Group (TPG).

But the Business Herald understands TPG, who in 2007 tried to mount a bid to buy SkyCity Entertainment, was not the other main party.

TPG is thought to have had a look at the business several months ago and decided not to mount a bid.

The other party is understood to also have had links to Haier.

Market commentator Arthur Lim said it was unlikely a purely financial investor or a plain capital raising would have received the level of support from shareholders that it has received since the deal was announced.

Fisher & Paykel's share price closed up 5c at $1.16 yesterday - a big rise from the 65c it was at before the deal was announced.

One source yesterday questioned the 80c a share deal with Haier, calling it a "soft deal" after the share price rise.

But Lim said it was a chicken-and- egg situation. "F&P's share price definitely reflects the fact there is a lot to be gained by having a cornerstone shareholder like Haier. If it was another buyer, I doubt the share price would be running the way it is."