Heartland New Zealand has confirmed it could be interested in
buying the finance division of Fisher and Paykel Appliances,
the takeover target of giant Chinese appliance manufacturer
The marketplace was speculating for several days that
Heartland could be considering a purchase, but that appears
to have been jumping the gun.
Haier already has a 20% cornerstone stake in Appliances, plus
a further 17.46% held under a lock-up agreement with another
shareholder. The total $1.20 per share offer values
Appliances at $869 million.
Haier has set a minimum target of eventually holding "more
than" 50% of Appliances.
Craigs Investment Partners broker Paul Valk believed if the
Haier takeover was successful, the Chinese manufacturer would
sell the finance division.
"Haier are unlikely to be wanting to own a small finance
company in New Zealand. They could flick it," Mr Valk said.
Heartland head of treasury and strategy Mark Steven, when
contacted, said Heartland was always open to considering
assets for acquisition, but if that asset was Appliances'
finance arm, Heartland "would have to have a bigger think
"It is an asset Heartland would be interested in having a
look at, but I'm circumspect on whether it [the finance arm]
will be for sale," he said.
Mr Valk said while trading in Appliances' shares had seen a
lot of speculative activity since the takeover bid, investors
were not yet factoring in any potential sale of the finance
However, a recent Wall Street Journal article has been
doing the rounds of investors, specifically raising the
question of the finance division's future and the possibility
Heartland could be a buyer.
"Amid the buzz of a takeover offer for Fisher and Paykel
Appliances, the potential sale of its $US224 million-valued
[$NZ251 million] finance business has been largely
overlooked," the Wall Street Journal reported.
Heartland was created in January last year through the $2.2
billion merger of Marac Finance, Canterbury Building Society
and Southern Cross Building Society, and went on to buy PGG
Wrightson Finance Ltd.
It is waiting for a decision by the Reserve Bank on whether
its application to become a bank has been successful.
An announcement from the bank is expected towards the end of
The Wall Street Journal said Appliance's finance arm
had been a solid performer during the past five years, while
Appliances business had struggled.
The finance division's revenue might be just a fraction of
Appliances' revenue to March 31, respectively $139.7 million
versus $891.5 million, but its earnings before interest tax
and depreciation was $37.8 million, compared with just $7.5
million for Appliances.