FPA Chart

[root]

Bosch and Siemens Home Appliances are rattling the chains but Whirlpool still quiet. Not sure what a blocking bid achieves unless it gets people on the board.

[Lizard]

Bosch and Siemens Home Appliances are rattling the chains but Whirlpool still quiet. Not sure what a blocking bid achieves unless it gets people on the board.

Blocking bid will mean they can still read a full set of accounts each year and the odd investor presentation telling them everything FPA is planning to do.

[Balance]

Blocking bid will mean they can still read a full set of accounts each year and the odd investor presentation telling them everything FPA is planning to do.

Expensive way of getting market infor? Especially when Haier is already a listed company.

And please, no comments about China accounting standards and enforcement - they are tougher over there than NZ. You only have to look at our finance companies to know how lax and backward our accounting and compliance processes & standards are in NZ.

But hi, here's hoping too!

[Lizard]

Hardly expensive if they expect (as I would) to extract more from Haier for the shares later (plus divs in the meantime).

As for information, buried in a large company, F&P's actions will be less market sensitive and the requirement for disclosure reduced.

[steamroller]

http://www.nbr.co.nz/article/haier-bid-prompts-credible-approaches-fp-dw-p-128256

Maybe there is action yet to come...

[janner]

" Maybe there is action yet to come... "

Maybe there isn't..

Really only for those already committed in my mind.. It is now in the hands of the big players.

Yes I missed out on this movement.. You can not win them all.. Will I chase it ??..

No !.. There are greener fields out there waiting to be harvested..

[elZorro]

Bosch look quite interested in a blocking stake. This from the Herald, yesterday's news.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10833624

[Balance]

Bosch look quite interested in a blocking stake. This from the Herald, yesterday's news.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10833624

From today's NZ Herald : http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10833833

More than tyre kicking - sounds like someone wants to do due diligence?

We may see a Warehouse type situation where Bosch, Whirlpool or one of the Japanese players decide to make a counter offer now that they know directors are okay with the $1.20 price so anything above that will automatically be acceptable?

Or they may decide to grab a quick 20%?

Well, Belgie-me-ole-mate, let's see what emerges over the next two weeks. No hurry to sell, that's for sure.

No downside at $1.175 - worse case scenario is $2.5 cents for 2% return for a few months' holding return. Upside may be a nice surprise.

A FAP comes once in a lifetime for these big companies.

[Scumich]

Seems Sam Stubbs of Tower will not be a seller at $1.20:

http://www.stuff.co.nz/business/industries/7679453/Tower-says-F-P-Appliances-offer-too-low?cid=edm:businessday:dailybrief

Will be interesting to see what valuation range Grant Samuel comes up with.

[Lizard]

Will be interesting to see what valuation range Grant Samuel comes up with.

Whatever one the independent directors would prefer them to?

It would be very easy to come up with a low ball valuation for FPA by deciding "fully maintainable earnings" could reasonably be assessed from the past two years... it would also be possible to come up with a high ball valuation by using "company provided forecasts of new product sales and margins" (rigorously assessed of course...).

[winner69]

Whatever one the independent directors would prefer them to?

It would be very easy to come up with a low ball valuation for FPA by deciding "fully maintainable earnings" could reasonably be assessed from the past two years... it would also be possible to come up with a high ball valuation by using "company provided forecasts of new product sales and margins" (rigorously assessed of course...).

Belg did the numbers a few weeks ago .... why not use him and save a lot of bother

[Lizard]

Belg did the numbers a few weeks ago .... why not use him and save a lot of bother

Yep... probably couldn't quite call him an "independent" adviser though...

.... lies, damned lies, and independent adviser valuations. :p

[Xerof]

All I am saying is wait and see what develops, as it ain't over until it's over

Say 50 times to yourself before going to sleep......

[elZorro]

Rod Oram has an article on FPA that goes deeper than most (SST, today).

He suggests that Haier should not try for more than 49% of the company, because to go higher than that will lose the backing of the very staff who are the backbone of Fisher and Paykel. Already, he suggests, Haier has done very well out of the 20% shareholding, because the staff here have broad skills, by necessity. Chinese staff of Haier (30x the turnover of F&P) could come here for training etc.

Rod made the point that despite fond hopes when Haier first rode to the rescue, the F&P brand has barely made it into the Chinese market. There have been unexplained and extensive delays in the product testing and certification processes that would allow NZ designed appliances to fully compete with other offerings.

A 49% shareholding will still give Haier effective control, but the NZ market will also support the company.

[Balance]

Rod Oram has an article on FPA that goes deeper than most (SST, today).

He suggests that Haier should not try for more than 49% of the company, because to go higher than that will lose the backing of the very staff who are the backbone of Fisher and Paykel. Already, he suggests, Haier has done very well out of the 20% shareholding, because the staff here have broad skills, by necessity. Chinese staff of Haier (30x the turnover of F&P) could come here for training etc.

Rod made the point that despite fond hopes when Haier first rode to the rescue, the F&P brand has barely made it into the Chinese market. There have been unexplained and extensive delays in the product testing and certification processes that would allow NZ designed appliances to fully compete with other offerings.

A 49% shareholding will still give Haier effective control, but the NZ market will also support the company.

Takeover code - unless all shareholders agree with a special resolution, 49% cannot be done. 20% plus 1 share to 50% less 1 share is 'no-fly' zone.

Rod writes like Haier knows nothing about manufacturing and nothing about design? On the contrary!

And he writes like Haier is a foolish investor (like NZ companies usually are when overseas) - why would Haier want to help FAP penetrate the China market when Haier has only 20%? Only a super dumb Haier would help FAP lift its earnings into the biggest growth market - and then, have to pay a huge price to take FAP over!

Nope - Haier has played it smart. They have now seen first hand and directly the potential of FAP and now, they strike.

How will New Zealand shareholders respond? By and large there will be few holding off as $1.20 is a big enough price for them to exit.

I am with Belgie - watch the action unfold. More twists and turns yet.

[elZorro]

Takeover code - unless all shareholders agree with a special resolution, 49% cannot be done. 20% plus 1 share to 50% less 1 share is 'no-fly' zone.

Rod writes like Haier knows nothing about manufacturing and nothing about design? On the contrary!

And he writes like Haier is a foolish investor (like NZ companies usually are when overseas) - why would Haier want to help FAP penetrate the China market when Haier has only 20%? Only a super dumb Haier would help FAP lift its earnings into the biggest growth market - and then, have to pay a huge price to take FAP over!

Nope - Haier has played it smart. They have now seen first hand and directly the potential of FAP and now, they strike.

How will New Zealand shareholders respond? By and large there will be few holding off as $1.20 is a big enough price for them to exit.

I am with Belgie - watch the action unfold. More twists and turns yet.

That may all be true, Balance. However FPA does have the dishdrawer, the smartdrive, a new compressor, and no doubt a few other IP goodies. You can't blame Rod Oram for banging the drum about NZ gearing up around smart exports. He's passionate about it.

Haier have come fully armed, as one reporter states.

http://www.stuff.co.nz/business/opinion-analysis/7687903/Successful-raiders-enter-the-fray-fully-armed

[Balance]

That may all be true, Balance. However FPA does have the dishdrawer, the smartdrive, a new compressor, and no doubt a few other IP goodies. You can't blame Rod Oram for banging the drum about NZ gearing up around smart exports. He's passionate about it.

Haier have come fully armed, as one reporter states.

http://www.stuff.co.nz/business/opinion-analysis/7687903/Successful-raiders-enter-the-fray-fully-armed

No debate that FAP is NZ's standout manufacturer with wonderful IPs and a proud history of innovation, falir and design.

If Haier is successful, it will be a sad sad loss to NZ - so let's hope they are not successful at 100%.

Having said that, nobody could blame Haier for making the takeover offer the way it has happened. It's business.

New Zealanders only have themselves to blame for not supporting companies like FAP. It is very telling that the two biggest shareholders in FAP post-recapitalization are both from overseas! Whatever happened to all the New Zealanders who say they want to support NZ companies?

Rod Oram should write more about New Zealanders preferring to put billions into finance companies and into holiday homes in Fiji, Gold Coast, Queenstown, Northland etc. Just a few hundred millions of that lost money into FAP would see the company stay in NZ's hands.

Belgie and I are proud to say we put our money where our mouths are. Can Rod Oram say the same?

[Balance]

Plenty being traded since the Haier annoucement ... methinks someone will appear who is building blocking stake soon.

Don't be too sure, Belgie-me-ole-mate. Could be a friendly party building up 'acceptances' to flick to Haier to get them to 50%.

[Balance]

Plenty being traded since the Haier annoucement ... methinks someone will appear who is building blocking stake soon.

Hmmmm - 118.5c and rather agressive buying so you could well be right, Belgie-me-ole-mate.

I guess whoever is buying now is guaranteed a 1.5c (before brokerage of maybe, 0.1%) upside - really cheap option play as upside could be another 10c to 30c?

Gotto be in the game - once FPA is taken over, it's all over.

[CJ]

Hmmmm - 118.5c and rather agressive buying so you could well be right, Belgie-me-ole-mate.

I guess whoever is buying now is guaranteed a 1.5c (before brokerage of maybe, 0.1%) upside - really cheap option play as upside could be another 10c to 30c?Seem slike a safe bet. Potential upside with extremely small chance of a downside.

There is no regulatory reason why the takeover will be blocked (I am disappointed no lefties have called for FPA to be taken over by the government).
Haier is closer enough that there is no doubt they will get to 50%
Potential risk that their offer will scale back if they get over 50% but I am guessing they will buy all they are offered at $1.20
But potential for the price to be raised,either to get a bigger shareholding or to compete with a blocking stack competitor.

If I was a trader, I would be in, even at these lofty prices, due to minimal downside.

[elZorro]

I don't know why the government can't step in here and buy the rest of FPA to hold it on the country's behalf. It worked for AIR NZ. They could then outwork all of the R&D to IRL or whatever it's called now...and this would keep the boffins in proper jobs without having to apply for funding all the time. It's a win-win all round.

Don't worry CJ, we're not altogether crazy over on the left.;)

[Balance]

119c and sellers now getting thin while bid volume keeps increasing.

Sense something is going to happen, Belgie me ole mate?

[elZorro]

elZ ... I assume your tongue was very firmly planted against your cheek ... It did make me chuckle. Nice one.

Maybe, maybe not :). The bit about IRL certainly was, and National are putting a lot of faith in their staff. FP's mate David Cunliffe spotted an opportunity for a sound bite.

http://tvnz.co.nz/politics-news/fisher-and-paykel-takeover-bid-worries-opposition-5089341

I will not be forgetting that FPA could be delisted from the sharemarket here, under a National term. The Haier foothold of 20% was also established under a National term in May 2009.

If we were not so obsessed with property, and more of a mind to seek profits in the sharemarket first, before using that to buy property without as much interest cost, FPA would not have been so unloved here. We have forgotten the story, until Haier reminded us.

Now we could lose all of the manufacturing and the R&D team over time, and maybe simply because NZ investors would rather pay bank interest than taxes.

[CJ]

There is no regulatory reason why the takeover will be blocked (I am disappointed no lefties have called for FPA to be taken over by the government).


FP's mate David Cunliffe spotted an opportunity for a sound bite.

http://tvnz.co.nz/politics-news/fisher-and-paykel-takeover-bid-worries-opposition-5089341

I will not be forgetting that FPA could be delisted from the sharemarket here, under a National term. The Haier foothold of 20% was also established under a National term in May 2009. And there it is.

Haier invested in May 2009. National won in November 2008. Unless FPA managed the most amazing F-up in under 7 months, FPA decline was due to Labour. The fact is the FPA screwed up under Labour's rule.

I cant really see how National can be blamed if the takeover gets 100%. You could argue they should do something with the Reserve Bank but from my understanding, it is being run exactly the same way as it was under the previous Labour government.

EDIT: I just want to point out that one of the 3 major items that caused FPA to go into decline was a massive stock build up due to moving a production plant offshore - which it did under a Labour government - making lots of poor helpless unioned employees unemployed.

[elZorro]

And there it is.

Haier invested in May 2009. National won in November 2008. Unless FPA managed the most amazing F-up in under 7 months, FPA decline was due to Labour. The fact is the FPA screwed up under Labour's rule.

I cant really see how National can be blamed if the takeover gets 100%. You could argue they should do something with the Reserve Bank but from my understanding, it is being run exactly the same way as it was under the previous Labour government.

EDIT: I just want to point out that one of the 3 major items that caused FPA to go into decline was a massive stock build up due to moving a production plant offshore - which it did under a Labour government - making lots of poor helpless unioned employees unemployed.

CJ, I think that if you look deeper you might see that FPA missed out on some R&D funding under National's strict rules (3% of T/O approx R&D backdated spend for three years) from 2009 onwards. I know for a fact they've turned down some interesting new design ideas in the meantime, and of course Labour's R&D tax credits would have helped ensure the design team was constantly expanding. New designs could have ensured more staff were employed here, making the earlier runs.

Labour helped set up the reduced hours regime to keep more people employed.

You're right, in that no government can stop the flow of low cost manufacturing bases to Asian countries. But if they intervene with enough good intention, they can ensure that high-value manufacturing is encouraged, and always stays here. Who cares what the exchange rate is, what the freight cost is, if there is enough margin to play with.

Ba-boom?

[CJ]

A large established company like FPA shouldn't need government handouts for R&D funding - it should be self funding. And I dont think FPA is short of IP, that is the reason Haier is taking them over afterall.

[elZorro]

A large established company like FPA shouldn't need government handouts for R&D funding - it should be self funding. And I dont think FPA is short of IP, that is the reason Haier is taking them over afterall.

It's not a handout, how many times do I need to explain it, it should be an investment that brings employment, prosperity for the nation, from higher exchange earnings, and taxes for central government from overseas income. At what point should FPA sit back and say, OK, we've got enough IP now, let's just stop here. How long would they stay competitive for?

[Balance]

CJ, I think that if you look deeper you might see that FPA missed out on some R&D funding under National's strict rules (3% of T/O approx R&D backdated spend for three years) from 2009 onwards. I know for a fact they've turned down some interesting new design ideas in the meantime, and of course Labour's R&D tax credits would have helped ensure the design team was constantly expanding. New designs could have ensured more staff were employed here, making the earlier runs.

Labour helped set up the reduced hours regime to keep more people employed.

You're right, in that no government can stop the flow of low cost manufacturing bases to Asian countries. But if they intervene with enough good intention, they can ensure that high-value manufacturing is encouraged, and always stays here. Who cares what the exchange rate is, what the freight cost is, if there is enough margin to play with.

Ba-boom?

Only in NZ do you have pimpled-faced Treasury staff making free market policies without consideration of the benefits of employment and the good of the social fabric of the nation.

I had a chat with a senior FPA executive a few years ago and they gave up talking with the NZ government (be them Labour or National) about the need for NZ to provide real incentives to site high-tech manufacturing plants in NZ. For the sake of $15m in incentives, FPA had no choice but to move one of its plants offshore.

There was no bitterness in the voice of the executive - just resignation that a government cannot see the benefit of keeping jobs in NZ.

What is $15m when you consider the NZ government spends that in hours of social welfarism every day!

[Hoop]

And the US govt shouldn't have funded NASA and getting to the moon either? The high-tech fallout from the Moon program is well documented; literally thousands of flow on products. What if FPA took their direct drive motors, tweacked them around a bit and then used them in something completely different? You'd get a new company highly focused on motors instead of whiteware. Innovation is a strange thing with the truelly inovative lerging from one place to another.

That reminds me...I must put my drill on the charger.......

[winner69]

And the US govt shouldn't have funded NASA and getting to the moon either? The high-tech fallout from the Moon program is well documented; literally thousands of flow on products. What if FPA took their direct drive motors, tweacked them around a bit and then used them in something completely different? You'd get a new company highly focused on motors instead of whiteware. Innovation is a strange thing with the truelly inovative lerging from one place to another.

Maybe follow Welington Drive Technology's lead?

[elZorro]

Only in NZ do you have pimpled-faced Treasury staff making free market policies without consideration of the benefits of employment and the good of the social fabric of the nation.

I had a chat with a senior FPA executive a few years ago and they gave up talking with the NZ government (be them Labour or National) about the need for NZ to provide real incentives to site high-tech manufacturing plants in NZ. For the sake of $15m in incentives, FPA had no choice but to move one of its plants offshore.

There was no bitterness in the voice of the executive - just resignation that a government cannot see the benefit of keeping jobs in NZ.

What is $15m when you consider the NZ government spends that in hours of social welfarism every day!

Thanks for that post Balance. This is the tragedy, right there. $15mill could employ and train 150 technical design people for a year, pushing R&D projects through. FPA have sales channels, so unlike CRIs and universities, they know what is likely to sell, and for how much. Designing a product, armed with that information, is not as likely to squander cash. The manufacturing follows on afterwards, maybe for 10-20 years, without much modification.

[CJ]

Maybe follow Welington Drive Technology's lead?Beat me too it.

ElZorro - Your comparison between NASA and FPA is not valid as NASA. The government funds Universities (akin to NASA) and things flow out of that (eg. Endace).

[Balance]

Beat me too it.

ElZorro - Your comparison between NASA and FPA is not valid as NASA. The government funds Universities (akin to NASA) and things flow out of that (eg. Endace).

Look at the Singapore Inc model - government provides incentives to entice companies to set up in Singapore, creates employment, employment creates growth, growth creates wealth, wealth creates savings and taxes, savings and taxes go back into investments etc etc.

Compare that to NZ Inc - government pays out billions in social welfare, borrows - it's too depressing to carry on!

Heck, other countries are busy trying to entice industries and companies to set up base - NZ is too busy getting rid of what we have! All in the name of the free market!

[CJ]

Look at the Singapore Inc model - government provides incentives to entice companies to set up in Singapore, The Key piont is to set up new businesses. FPA would not be classified as a new business so would not get support under the Singapore model. However, if Haier decided to set up a plant in NZ, it would get support. FPA would be pretty pissed of at this I would expect.

Or are you calling for protectionism, like the the US does for their farming industry, which NZ is challenging in the WTO.

Or do all businesses get it, in which case isn't it just an across the board tax cut?

I see your point but you have to work it all the way though and shee how it impacts/ is fair on other businesses. The only exception I see is where the government enters into a contract as it should be able to factor in the benefits that flow back to it through tax should a NZ company win (example being awarding the kiwirail locomotives to a Chinese company rather than the NZ co).

[Balance]

The Key piont is to set up new businesses. FPA would not be classified as a new business so would not get support under the Singapore model. However, if Haier decided to set up a plant in NZ, it would get support. FPA would be pretty pissed of at this I would expect.

Or are you calling for protectionism, like the the US does for their farming industry, which NZ is challenging in the WTO.

Or do all businesses get it, in which case isn't it just an across the board tax cut?

I see your point but you have to work it all the way though and shee how it impacts/ is fair on other businesses. The only exception I see is where the government enters into a contract as it should be able to factor in the benefits that flow back to it through tax should a NZ company win (example being awarding the kiwirail locomotives to a Chinese company rather than the NZ co).

FAP would certainly qualify under the Singapore model - as long as it brings R&D as part of the package.

[elZorro]

FAP would certainly qualify under the Singapore model - as long as it brings R&D as part of the package.

It's time for governments here, to really take R&D seriously. It's our main chance for profitable manufacturing in a global economy. Results from that would beat any 'think big' project, so why are they spending a few million here, a few million there?

CJ, forget about across the board tax cuts, the govt couldn't afford it. If they want more tax revenue, they'll need more employment, and this won't be on farms, it'll be in the cities. i.e. high value manufacturing.

Tim Hunter as Chalkie writes an in-depth article, well researched.

http://www.stuff.co.nz/business/opinion-analysis/7698445/World-class-Fisher-Paykel-an-asset-to-country

[CJ]

CJ, forget about across the board tax cuts, the govt couldn't afford it. If they want more tax revenue, they'll need more employment, and this won't be on farms, it'll be in the cities. i.e. high value manufacturing.

Tim Hunter as Chalkie writes an in-depth article, well researched.

http://www.stuff.co.nz/business/opinion-analysis/7698445/World-class-Fisher-Paykel-an-asset-to-countryAgree - the article was a good one. Good summary of their issues back in 2008 and why they are now a good investment, especially at pre bid 75c.

Re targeted government spending, how do you target it. I assume you will say Labour's R&D tax credit? Was that the most efficient way of doing it - is there a simpler way (relying on IFRS accounts for example?). What about other sectors that employee people that dont do R&D?

EDIT: I forgot to note that the article was far to Diplomatic. FPA sells its appliances around the world, including the US, the most litigious country in the world, and yet the products haven't managed to get certified in China (where companies think it is ok to put poison in baby formula!).

Haier obviously was on a go slow in helping FPA get approval as it knew it would increase FPA profits and therefore its shareprice.

[macduffy]

It's natural that the NZ investment community should regret/deplore the likely loss of an important company from our sadly diminishing stock exchange but one wonders where they/we were in 2008 when FPA was experiencing major problems. Did the funds offer their support to rescue an "iconic" NZ company, confident in the knowledge that it was a world-beater and that its cutting edge technology would win through if it was cut a bit of slack and supported financially meantime? Or did FPA reject this option and rush to do a deal with Haier?

I don't know the answer to that but holders are doing the obvious in crying "inadequate" "opportunistic" offer. It's now just a matter of "how much".

[Balance]

It's natural that the NZ investment community should regret/deplore the likely loss of an important company from our sadly diminishing stock exchange but one wonders where they/we were in 2008 when FPA was experiencing major problems. Did the funds offer their support to rescue an "iconic" NZ company, confident in the knowledge that it was a world-beater and that its cutting edge technology would win through if it was cut a bit of slack and supported financially meantime? Or did FPA reject this option and rush to do a deal with Haier?

I don't know the answer to that but holders are doing the obvious in crying "inadequate" "opportunistic" offer. It's now just a matter of "how much".

Typical NZ reaction - a friend in need is no friend back in the dark days of 2008/2009.

Only Haier came to the party and paid a huge premium to rescue FPA.

[Balance]

http://www.directbroking.co.nz/directtrade/dynamic/announcement.aspx?id=2255996

Not just Haier ... I and others came to the party and drunk their fill ... and we just kept partying down to 35c ...

Good on you, Belgie-me-ole-mate.

Glad there are still some of us left with longer term perspective even when it was ouchy ouch territory for a 'longer term' while!

[elZorro]

Agree - the article was a good one. Good summary of their issues back in 2008 and why they are now a good investment, especially at pre bid 75c.

Re targeted government spending, how do you target it. I assume you will say Labour's R&D tax credit? Was that the most efficient way of doing it - is there a simpler way (relying on IFRS accounts for example?). What about other sectors that employee people that dont do R&D?

EDIT: I forgot to note that the article was far to Diplomatic. FPA sells its appliances around the world, including the US, the most litigious country in the world, and yet the products haven't managed to get certified in China (where companies think it is ok to put poison in baby formula!).

Haier obviously was on a go slow in helping FPA get approval as it knew it would increase FPA profits and therefore its shareprice.

Hmm. IFRS accounts for tax refunding on R&D, that might be harder across the board, as some like me use older systems. The R&D tax credits have already had all the work put into the system, paid for by taxpayers. The documentation needs a rocket put under it and all the repeated sections cut out, someone must have thought they'd get paid by the word. And it should get printed off in a booklet. But once that was done, business owners could handle the end of year filing for credits.

And now the tricky part, what about businesses that don't do R&D. For one, they could benefit from having more customers as a result of the policy. Hamilton gets really busy around Fieldays, as firms get marketing work done, buy demo parts and get design work completed. They buy stuff in shops and trade stores. Later on they will see the increased parts orders and other purchases from employed people. Businesses can always move sideways to take advantage of tax incentives, that's the idea. I can't see why a retailer who is quiet, cannot import or build something locally, perhaps add value with R&D, but sell it via courier on Trademe in addition to the shop floor customers. Quiet retailers can also target international sales with the web, and these shopping basket CMS packages are now cheap, and NZ Post is a low cost and cheerful export point. No excuses.

[macduffy]

The Herald's Fran O'Sullivan comments:


http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10834909

All a bit too late, methinks.

:(

[Scumich]

EDIT: I forgot to note that the article was far to Diplomatic. FPA sells its appliances around the world, including the US, the most litigious country in the world, and yet the products haven't managed to get certified in China (where companies think it is ok to put poison in baby formula!).

Haier obviously was on a go slow in helping FPA get approval as it knew it would increase FPA profits and therefore its shareprice.

Absolutely. The spin accompanying Haier's buy in was that they would assist FPA enter the lucrative Chinese market. This was at a time when the Chinese government was pumping up their economy with stimulus resulting in a huge infrastructure and housing boom. If Haier was serious at helping, FPA would have had a range of products up and running, fully certified and selling in the market within 6-9 months. Three years plus down the track, they are still not in the market and the Chinese housing market boom is over!

Haier was no white knight, more like a vulture circling a dying carcass. Now that FPA is starting to come to life again they are in with an opportunistic bid. If they succeed in getting 100% you will see FPA designed products selling in China within a few short months.

[elZorro]

Yep Scumich, the market is brutal. Fran O'Sullivan was suggesting ACC or the Super Fund should buy into FPA in a bigger way.

Leon D commented:


Care for any Humble Pie Fran ?
I am glad you have left the dark side, we (The real Capitalists who understand results depend on the strength of the middle class) welcome you with open arms.
What help do you require to keep you on the straight and narrow?

[CJ]

(I like Fran O'Sullivan generally, but I object to the super fund being treated as a white knight for industries in trouble).I am not sure exactly what Frans view on the SUper fund is. Is she suggesting:

- it should buy in to protect NZ industry, or
- it should buy in because it should be a good long term investment (the type super funds make)

[Balance]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10835212

3.31 for 100% ... Now we're talking. Quite a bit Haier than my valuation for full ownership. Would love to see their maths. 1.65 for mixed ownership which is where I'd like the current price to be.

FPA is looking like another BNZ, ASB, etc. every day.

Very tongue-in-cheek from Tower but good to get the bid price juices going!

Tower is saying the equivalent of a super developer buying a piece of prime real estate from a land owner which can be developed into a multi-super complex worth billions in value and profits.

Tower is saying that the super developer should share most of that value and profits with the land owner.

Now who is going to do a deal like that? Put the money up, take the risk and give away most of the profits?

Some of the upside, yes but certainly not most of the upside!

My pick is that the independent valuation will come in at $1.35 to $1.50 for FAP as is where is, and $1.50 to $1.75 if Haier gets 100%.

[CJ]

Tower is saying the equivalent of a super developer buying a piece of prime real estate from a land owner which can be developed into a multi-super complex worth billions in value and profits.

Tower is saying that the super developer should share most of that value and profits with the land owner.

Now who is going to do a deal like that? Put the money up, take the risk and give away most of the profits? I am not sure that is what Tower is saying. They have put two values on it. They say there are super profits to Haier if they can integrate FPA IP into their sales volume.

But they also put a price on the company as listed and I am guessing they are just trying to get Haier to go to the top of that band. Sounds like $1.5 - 1.6 is about it

[macduffy]

So if Tower is serious about its very precise $3.31 valuation, I assume that it is also working to put together a group of like-minded instos and other biggish shareholders to ensure that Haier doesn't achieve the magic 90% in the, highly likely, event that the price won't come anywhere near $3.31?

;)

[RRR]

It is a shame we are losing FPA. I will not let it go easily - will hold for a better price.

[winner69]

Esp for Balance Carmel Fisher has a piece in the STT today "Icons have no place in vesting"

She says that as soon as some foreigner shows some interest in a NZ co we put our rosé tinted glasses on and toss our objective analytical glasses aside

I think she is saying that FPA might have been a great company once but if brought on the basis of profit potential this doesn't stack up. As a turnaround story a few months ago an investment thesis along these lines stood up and you guys have done well

As to calls for the Nz Superfund to invest in FPA to keep it in nz I agree with Carmel ....heck we would have to cut pensions if we relied upon dogs like FPA to fund future pensions

Her last statement was "the most important investment ICON is profit"

Balance already faking of his chair and choking on his coffee ... I can see it now

[Balance]

Esp for Balance Carmel Fisher has a piece in the STT today "Icons have no place in vesting"

She says that as soon as some foreigner shows some interest in a NZ co we put our rosé tinted glasses on and toss our objective analytical glasses aside

I think she is saying that FPA might have been a great company once but if brought on the basis of profit potential this doesn't stack up. As a turnaround story a few months ago an investment thesis along these lines stood up and you guys have done well

As to calls for the Nz Superfund to invest in FPA to keep it in nz I agree with Carmel ....heck we would have to cut pensions if we relied upon dogs like FPA to fund future pensions

Her last statement was "the most important investment ICON is profit"

Balance already faking of his chair and choking on his coffee ... I can see it now

Except for your mention, W69, I only ever take notice of Carmel Fisher and her funds because she and her funds are the best indicators of where stocks are going to go!

Their "Buy 'em High and Sell 'em Low" strategy means 9 times out of 10, you do the exact opposite of what she does.

Save for the dumb Kiwisaver savers out there who do not know any better, no other market players or investors take any notice of her and her funds.

She does damned well though - moving from one generation to another, from one pool of investors to the other - "Blow 'Em Up, and Move on"?

So I think FPA is going higher!

[troyvdh]

,,,,balance (GURU)...Ive probably forgotten..or have never been told....what shares and how many do you hold (NZ) currently.....I will tell you mine ...if....

cheers...


The reason I ask is you appear to be passionate (like me)....about various shares.....usually your stance appears to be slanted in the negative...no problem with that at all....its probably welcomed in fact....however given that you indeed a prolific poster....i believe that it is not unreasaonable to ask about your level of investment in the MKT....this would ensure ..surely that your comments have some validity.....I currently have about 180k...invested....cheers....troy

[winner69]

Any idea what the 'independent advisers' will be .... methinks guidance has been given to make it 125-140

What do you think?

Sam Stubbs not allowed to enter

[winner69]

Those figures do not inclue a premium for full control?


Prob does ....but I don't count

What you think the guru advisers will come up with?

[winner69]

Our mate Chris Lee got stuck into Tower .... the funds management side that is .... sort of saying they talk a lot of hot air (my intepretation) .... and even though Stubbs says FPA is a steal Tower weren't very much overweight anyway

Sorry Mr Lee but I copy and paste from your site (ie fully accrediting you with this quote) - 'Few wanted the shares in FPA six months ago. Haier should easily get to 50.1%, but may struggle to get to 100%. If that is the case Tower, and all the other critics, can hold on to their shares awaiting the day when profits and dividends can service a $1.20 share price."

Very good point (so you can forgive me for copy and pasting from your site eh?) - what does this mean

Say Haier go to $1.40 - gives FPA an enterprise value of $1.1 billion (a little bit of debt attributed to appliances I note) ..... lets assume finance is hocked off for say maybe $200m ..... that leaves appliances valued at $900 million ..... if Haier only own part and things are still transparent would need earnings of $80m to $120m to justify that .... and what was applinaces earnings at the peak of the boom with high margins .... as Lee sort of says maybe the likes of Tower have a long wait


Disc - just my quick calcs on the whiteboard on the iPad which probably hold no creedence whatsoever .... just yring to see what Lee was getting at

[winner69]

But why would Haier want to share that with us?

Might make them feel comfortable dishing out more than they wanted to to get full control ... but keep maergin improvement to themselves

[Balance]

But why would Haier want to share that with us?

Might make them feel comfortable dishing out more than they wanted to to get full control ... but keep maergin improvement to themselves

They will not want to but may be prepared to pay some across to get control.

[winner69]

They will not want to but may be prepared to pay some across to get control.

so really it comes down to how much of the impending 'super profits' they want to share with us eh

[Balance]

so really it comes down to how much of the impending 'super profits' they want to share with us eh

Let's see how good the independent directors are at negotiating the 'best' deal for shareholders.

[Eclipse]

Offer documents out https://nzx.com/companies/FPA/announcements/227779
Will be very interesting to see if Bosch comes back with something in the following days

(been following these forums for 3 years now and thought I'd make a post)

[pierre]

Intriguing that FPA SP ended up at 120 at close of play today. Maybe Mr Market is expecting Grant Samuel to come up with a valuation that's higher than Haier's 120? Your thoughts?

[stoploss]

Intriguing that FPA SP ended up at 120 at close of play today. Maybe Mr Market is expecting Grant Samuel to come up with a valuation that's higher than Haier's 120? Your thoughts?

More like end of quarter window dressing for funds ............

[Xerof]

The answer is:

yes, all acceptances treated the same.

[pierre]

Sure looks like it - not much point in paying more than $1.20 plus brokerage unless you're mad or pretty damn sure of a higher price.

[Balance]

Sure looks like it - not much point in paying more than $1.20 plus brokerage unless you're mad or pretty damn sure of a higher price.

Or a friendly party accumulating stock to make sure Haier gets over the 50% threshold.

[macduffy]

Or just getting carried away on the froth of a rising market.

Not a bad punt, for some, for the cost of a cent or so per share and a bit of brokerage!

:cool:

[Balance]

Let's see how good the independent directors are at negotiating the 'best' deal for shareholders.

Close at $1.205 so it's getting interesting for the independent directors.

Reasonable volume too, considering the buyers are mopping up everything they can lay their hands on at $1.20 and $1.205.

Almost smells like a Bosch or someone getting ready to spoil the Haier party?

[Jay]

Thinking of selling now it is over 1.20, not alot of difference for me with the number I have, to safe guard the capital, if Haier miss out will the price drop away again - so many questions.
Still think the top end of the "valuation'" will not be much more than $1.50.

However, as mentioned by some , somebody willing to pay over $1.20 knows something!! Did I just talk myself out of it again :confused:

[Balance]

Thinking of selling now it is over 1.20, not alot of difference for me with the number I have, to safe guard the capital, if Haier miss out will the price drop away again - so many questions.
Still think the top end of the "valuation'" will not be much more than $1.50.

However, as mentioned by some , somebody willing to pay over $1.20 knows something!! Did I just talk myself out of it again :confused:

This opinion piece by Tim Hunter, one of the best investigative market journalists in NZ, will give pause to those who think Haier will pay higher than $1.20.

http://www.stuff.co.nz/business/opinion-analysis/7759706/Haiers-F-P-bid-both-generous-and-cunning

Or has the sp above $1.20 tell us something more profound?

http://www.stuff.co.nz/business/industries/7759913/Downtown-boy-courts-uptown-girl

In the past, a sp above initial offer price always suggest a failed takeover or a higher offer.

Decisions, decisions, Jay!

[CJ]

Sparky - I think the really question is what is the risk of Haier pulling the offer or not reaching 50%. If you think that is minimal, hold on. The benefit of cashing out now is only if you think the offer wont succeed. The time value of money between the two options is otherwise too small for the potential upside. [My unprofessional view and given I dont hold, feel free to ignore.]

[CJ]

Why not try a 50/50 strategy ... Sell half into the offer so they get above 50% and you capitalise your gains but hold the rest for the eventual creap ...


Belgarion - exactly what I've been dwelling on this morning, and what my broker suggested yesterday.Of course they suggested that. They cant make money if you hold on and they cant recommend you sell as that is probably bad advice. So they go for the old "hedge your bets" line.

[stoploss]

Any idea what the 'independent advisers' will be .... methinks guidance has been given to make it 125-140

What do you think?

Sam Stubbs not allowed to enter

comes in @ 1.28 to 1.57, directors say " Don't accept haier offer"

[Balance]

comes in @ 1.28 to 1.57, directors say " Don't accept haier offer"

So mid-point is $1.415.

Let the negotiations begin!

[macduffy]

Or just getting carried away on the froth of a rising market.

Not a bad punt, for some, for the cost of a cent or so per share and a bit of brokerage!

:cool:

Looking like a nice payday for those who took the plunge!

[winner69]

So mid-point is $1.415.

Let the negotiations begin!

Funny process eh

If Haier had offered say 100 would Grant Samuel come in with 128-157 .... doubt it

Maybe Haier weren't that 'cunning' after all?

[Scumich]

Some interesting commentary in this NBR article: http://www.nbr.co.nz/article/fp-directors-say-dont-accept-haiers-offer-dw-130138

Apparently no competing offers in the works, but I am expecting (hoping!) Haier will come back with a better offer.

[pierre]

Apparently no competing offers in the works, but I am expecting (hoping!) Haier will come back with a better offer.

I think Haier will get over 50% at the present offer price However, they'll need to up it to near the mid-point of the Grant Samuel valuation if they want a sell recommendation from the directors and a decent shot at getting 100% of the company.

I wont be accepting at the current price but could be tempted at $1.40ish.

DISCL: Hold FPA at 61cps

[CJ]

I think Haier will get over 50% at the present offer price Probably right. So the question is do they want 50% or do they want it all. To get the technology, they need it all. Therefore expect a 'Haier' bid to come (haha - see what I did there), probably at the lower end of the range. If they dont get to 90%, they can take you out later at a higher price, like what Olam is doing with NZ Farming systems

[Balance]

Except for your mention, W69, I only ever take notice of Carmel Fisher and her funds because she and her funds are the best indicators of where stocks are going to go!

Their "Buy 'em High and Sell 'em Low" strategy means 9 times out of 10, you do the exact opposite of what she does.

Save for the dumb Kiwisaver savers out there who do not know any better, no other market players or investors take any notice of her and her funds.

She does damned well though - moving from one generation to another, from one pool of investors to the other - "Blow 'Em Up, and Move on"?

So I think FPA is going higher!

The Carmel Fisher law of investing is proven yet again.

[macduffy]

Here's a recent quote from Alan Kohler, writing about the likely disappearance of Arrium from the boards if the Korean consortium wins the day.


Australia’s listed equity market is very narrow and becoming more so. There are very few technology businesses in which to invest, or new media, or infrastructure businesses, or biotech and not many basic manufacturers. It’s all about banks and big miners.



Even more so for NZ's listed equity market - and one reason why I won't be completely devastated if Haier don't win FPA.

Disc: Holding FPA.

[pierre]

Closed at 125 today - I do hope Mr Haier is watching closely - and preparing to dig a little deeper into his bucket of yuan. Maybe he'll need a yuan tonne!

[biker]

Closed at 125 today - I do hope Mr Haier is watching closely - and preparing to dig a little deeper into his bucket of yuan. Maybe he'll need a yuan tonne!

Very droll. Several i hope!

[Balance]

Cue the Guantamera song:

�� There's only yuan haier offer....
�� Yuan haier offer....
�� Coz there's no higher offer....

Well, I sold some of my holding at $1.23 today (have earmarked the funds for a property settlement next week). Will let the rest ride.


And leave up to 17 cents per share behind? You are a good man!

[Balance]

Balance, I did agonise about the merits of it, but ultimately had a pressing use for some of the money right now. As I mentioned, I hedged by position by only selling half.

There isn't an extra up-to-17c on offer - yet. Maybe there will be. Maybe not.

Nothing wrong with going for a sure thing, STC!

[JMKC]

Probably right. So the question is do they want 50% or do they want it all. To get the technology, they need it all. Therefore expect a 'Haier' bid to come (haha - see what I did there), probably at the lower end of the range. If they dont get to 90%, they can take you out later at a higher price, like what Olam is doing with NZ Farming systems

Just so I'm clear...why given they have had a strategic alliance for 4 years do they now need 100% of the issued capital to get the technology? Does majority control not get you that to a degree?

[CJ]

Just so I'm clear...why given they have had a strategic alliance for 4 years do they now need 100% of the issued capital to get the technology? Does majority control not get you that to a degree?I think it was this article (and another couple) that I tried to summarise into 2 lines:
http://www.stuff.co.nz/business/opinion-analysis/7759706/Haiers-F-P-bid-both-generous-and-cunning

[macduffy]

Isn't it more an issue of "controlling" the technology, rather than of "getting" the technology?

And I'm not sure that 100% ownership is necessary for either.

[Balance]

Isn't it more an issue of "controlling" the technology, rather than of "getting" the technology?

And I'm not sure that 100% ownership is necessary for either.

If you get the technology, you can use it and modify it in any which way you choose.

If you control the technology only as FPA is still a public listed entity with minorities, the arrangement is that you pay to use the technology and only within the confines of the contractual arrangements.

[Jay]

Drifted back to 1.23 as at time of writing, not many thinking we will get a higher Haier (or other party) bid??

[Balance]

Drifted back to 1.23 as at time of writing, not many thinking we will get a higher Haier (or other party) bid??

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10838664

Excerpt : "It is now over to the independent directors to negotiate a higher price and FPA shareholders should not take any action until much nearer to Haier's November 6 closing date."

[Balance]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10838664

Excerpt : "It is now over to the independent directors to negotiate a higher price and FPA shareholders should not take any action until much nearer to Haier's November 6 closing date."

Share price inching higher to $1.245. I sense discussions in the background on the offer price.

My pick is $1.35.

[POSSUM THE CAT]

Balance my pick is they drop the offer & ask F&P to arrange the purchase of their 20% at $1.20 where would that leave the FPA share price. My opinion take the money & run

[Balance]

Balance my pick is they drop the offer & ask F&P to arrange the purchase of their 20% at $1.20 where would that leave the FPA share price. My opinion take the money & run

Then you should short the stock.

[macduffy]

Balance my pick is they drop the offer & ask F&P to arrange the purchase of their 20% at $1.20 where would that leave the FPA share price. My opinion take the money & run

That would imply that Haier have come to the conclusion that their strategy in buying into FPA was a mistake. What evidence do you have to posit that?

[Balance]

That would imply that Haier have come to the conclusion that their strategy in buying into FPA was a mistake. What evidence do you have to posit that?

If Possum the Cta really believes that, he will be shorting the hell out of FPA.

[POSSUM THE CAT]

The broker I use does not allow shorting. But I have listed this stock as a dog for years & bar for HAIER it would have gone under long ago. If HAIER cannot get the deal it wants it should just get out & let FPA sink &buy it off the receivers. Take your blinkers off or is it the one track mind that is your problem. I did not buy FPA on the way up as I saw the probable failure of this offer by the bigoted investors that think the sum shines out of FPA.

[Balance]

The broker I use does not allow shorting. But I have listed this stock as a dog for years & bar for HAIER it would have gone under long ago. If HAIER cannot get the deal it wants it should just get out & let FPA sink &buy it off the receivers. Take your blinkers off or is it the one track mind that is your problem. I did not buy FPA on the way up as I saw the probable failure of this offer by the bigoted investors that think the sum shines out of FPA.

Open up a CMC account. Short to your heart's content.

[winner69]

That story that came out the other day that a major customer of Finance ws about to move somewhere else which would reduce the value of the finance arm ..... conspiracy theory says must have been haier who approached farmers with some incentive to start the rumour ...... heck 120 might be good price then seeing grant samuel put $260m on the finance arm

[JMKC]

Open up a CMC account. Short to your heart's content.

Not quite so easy. It is a little known fact that the nzx rules prohibit short selling of stocks under takeover (ridiculous i know). So, unless by some miracle someone allows shorting of the relatively illiquid aussie listing its a no go.

[Balance]

Not quite so easy. It is a little known fact that the nzx rules prohibit short selling of stocks under takeover (ridiculous i know). So, unless by some miracle someone allows shorting of the relatively illiquid aussie listing its a no go.

CMC operates differently.

You can sell to your heart's content.

[CJ]

CMC operates differently.

You can sell to your heart's content.Pretty sure I did this with CMC a while ago with CEN (??). It was my only successful trade which is why I closed my account as I lost all that money on USD:NZD gambles.

[POSSUM THE CAT]

CJ are you actually selling with CMC or just gambling with a bookmaker. They reserve the right to set their own prices not the Market (this is what I understand by reading their terms & conditions) So I will not even think about dealing with them

[CJ]

CJ are you actually selling with CMC or just gambling with a bookmaker. They reserve the right to set their own prices not the Market (this is what I understand by reading their terms & conditions) So I will not even think about dealing with themThat is part of the reason I stopped. My stop losses seemed to be hit by extreme volatility. Not sure if it was other punters stop loss hunting in an illiquid market, actual matching of the actual forex movements or games on behalf of CMC.

On this basis, I would only use again if I was forecasting big moves (ie. FPA to drop from 1.20 to 60) rather than try and profit from small margins (ie. USD going from 81c to 81.5c).

[Balance]

That is part of the reason I stopped. My stop losses seemed to be hit by extreme volatility. Not sure if it was other punters stop loss hunting in an illiquid market, actual matching of the actual forex movements or games on behalf of CMC.

On this basis, I would only use again if I was forecasting big moves (ie. FPA to drop from 1.20 to 60) rather than try and profit from small margins (ie. USD going from 81c to 81.5c).

No issues with CMC as long as you are dealing in liquid and transparent stocks, securities and positions.

[winner69]

How dare they .... haier say the 120 is fair price and grant samuel putting too much reliance on a 5 year strategic review and relevent forecasts out of that

[POSSUM THE CAT]

Winner without Haier FPA will be dead within 12months

[pierre]

Winner without Haier FPA will be dead within 12months

I very much doubt it.

Haier want FPA's technology - not the other way round. Other than some financial assistance, Haier has given F&P very little- and certainly not much help with entry into the Chinese market.

Seems to me that FPA has been doing some great work behind the scenes over the past couple of years. Haier is well aware of that and want to capitalise on it just as it's about to come to the market.

[winner69]

Winner without Haier FPA will be dead within 12months

Sales were below expectations in September they say which pushes out that forecast and heck if that big customer of fiance walked even haier mightn't want it at 120 eh possum

Still reckon haier weren't that cunning .... if they offered $1 then grant samuels would have saif 110-135 and haier could have saved a few millions

All these documents keep the printers and the postie happy eh

[POSSUM THE CAT]

Winner some NZ citizens think the sun shine out of F&P appliances Went to Austalia some years ago had to start again with appliances. Every shop tried to sell us F&P appliances even more so when they found we were Kiwis. When we said we were not interested. They admitted that they started with F&P crap as selling these gave them the biggest pay packet. Then they tried with a certain American brand fridges. Until I told them it was a rebadged Samsung fridge of lower spec than the Samsung fridge of higher specification but the same cabinet & works for over $500.00 cheaper. then they started to get real on deals. Why are Haier now the worlds largest appliance manufacturers. You only have to go into Harvey Norman In NZ & compare the Haier product with F&P product. If you did not believe all the F&P advertising bull sh*t & used your eyes you would buy the Haier appliances every time over F&P.

[CJ]

If you did not believe all the F&P advertising bull sh*t & used your eyes you would buy the Haier appliances every time over F&P.Went into Yellow shed looking for a dryer. Salesman said this is the same as the F&P (same factory, same parts) but is $200 less with the Haier brand on it. Same warranty (by FPA).

[pierre]

Possum & CJ - You both sound like you're very disappointed non-FPA holders.

I can understand your angst and bitterness about missing out on the little bonanza currently being enjoyed by those of us who do hold. However, rubbishing the company and its products wont fix your problem and wont stop me making a cool $100k on my investment either.

My wife and I have built two new homes in the past six years, furnished them both with F& P appliances and have had no drama of any kind with any of their products.

If FPA's stuff is as bad as you think it is and Haier's is so good, why on earth would the "world's largest appliance manufacturer" even bother with any involvement at all with the minnow from NZ? Your envy is showing - and it seems rather unattractive.

[CJ]

Pierre - not bitter. I have F&P dishdraw and fridge (their top of the line stainless versions). I was happy to pay that premium for the look and the techonolgy in the kitchen but in the laundry, their was no difference in look or technology so I didn't pay a premium just for the name.

It is clear why Haier wants to take over. It wants the technology and it doesn't want anyone else to have it.

Do I wish I was a holder - yes. However in the absence of a takeover, the return I have on my shares is probably similar to what FPA would be. I choose not to gamble on a takeover. Not that I am saying you were gambling on a takeover, as it was clearly going to be a good growth stock if bought at the bottom (I was an 'insider' at the time so couldnt).

I hope they dont get 90%. It is good to have a big manufacturer on the NZX. They go in cycles which is good for investing.

[POSSUM THE CAT]

Pierre I notice you put appliances in for sale not for lasting quality. At the price I would expect 20Years at least out of these appliances. When I have seen bottom of the line Simpson still going after 20years& they are about 30% of the price of a F&P dish drawer

[pierre]

No not for sale Possum. We moved from once town to another three years after building the first house - then went through the process again (despite the drama of dealing with the building industry!) We're not planning on moving again anytime soon.

[winner69]

NBR's Shoeshine talked to the guy from Gray ......he said 105 a bit low but 120 seemed a fair price even allowing for the blue sky stuff FPA are on about

Sounds like Haier had to go to 120 to get Gray on their side ....so from their point of view anything extra is just the icing on the cake

Gray make zillions from their multi year foray into FPA ....just shows averaging down pays of

[Balance]

NBR's Shoeshine talked to the guy from Gray ......he said 105 a bit low but 120 seemed a fair price even allowing for the blue sky stuff FPA are on about

Sounds like Haier had to go to 120 to get Gray on their side ....so from their point of view anything extra is just the icing on the cake

Gray make zillions from their multi year foray into FPA ....just shows averaging down pays of

Just shows how little confidence the average kiwi investor has in their own companies for Grays to comfortably accumulate 18% without having to pay up.

Now we have the Greens and Labour crying their big gigantic crocodile tears!

[Xerof]

Is Grays the old Orbis? I presume thats the case, as no change of ssh is evident ex Orbis

If so, you'll find they paid well over $2.00 for the first 5%+, and more than likely picked up a good proportion of the rest from Offshore and local fund managers who reduced holdings over the last few years. A bit rich blaming local mums and dads!

[winner69]

Is Grays the old Orbis? I presume thats the case, as no change of ssh is evident ex Orbis

If so, you'll find they paid well over $2.00 for the first 5%+, and more than likely picked up a good proportion of the rest from Offshore and local fund managers who reduced holdings over the last few years. A bit rich blaming local mums and dads!

You are correct Xerof ...the old Orbis

Apparently the first 5% was at 250 odd.

A lot has happened since but looks like 80mill will turn into 150 mill plus

As you say a lot bought off instos now saying 120 is a giveaway

With these fund managers it is a matter of career risk .....play safe .....don't take too many bets ....be in line with others etc etc ..no wonder managed funds returns are poor

[pierre]

Does anyone know when Haier will have to start reporting the volume of acceptances they have received from FPA shareholders - and how often they will be required to provide updates on their position?

[Xerof]

Each 1% or daily if greater

[CJ]

Does anyone know when Haier will have to start reporting the volume of acceptances they have received from FPA shareholders - and how often they will be required to provide updates on their position?


Each 1% or daily if greaterCorrect. Article in Herald re this today so they obviously haven't received more than 1% yet. Funds will hold out till last minute. I assume Haier is doing the rounds of the funds figuring what price they need to increase to to get the acceptances - is $1.28 enough or do they have to go higher. Funds are short term thinkers so my guess is quite a few will accept at last minute regardless (good boost for fund performance) as they wont want to be holding once the offer closes (post offer share price drop).

[pierre]

Correct. Article in Herald re this today so they obviously haven't received more than 1% yet. Funds will hold out till last minute. I assume Haier is doing the rounds of the funds figuring what price they need to increase to to get the acceptances - is $1.28 enough or do they have to go higher. Funds are short term thinkers so my guess is quite a few will accept at last minute regardless (good boost for fund performance) as they wont want to be holding once the offer closes (post offer share price drop).

Thanks for this. Interesting that most are sitting on their hands waiting for the next step - except those that are buying up in anticipation of a better price from Haier. I guess a quick flick from $1.23 to an almost certain $1.30+ with one-way brokerage over three weeks isn't a bad deal in percentage terms.

[macduffy]

The offer doesn't close until 6 November so there's no hurry to accept, at this stage. Progressive acceptance figures wouldn't be expected to move much until a few days before the close. Even then, takeover offers are often (usually?) extended although that can't be assumed, of course.

I wouldn't be betting too much on an "almost certain $1.30+" though. Haier have indicated that they aren't necessarily looking for 100% ownership from the offer. A further, better offer may not eventuate for months or years.

[POSSUM THE CAT]

If they do not get the minimum percentage they require. My opinion is they will pull the offer & either sell their share holding or wait six months & make alower offer when F&P is even deeper in the sh*t

[Balance]

If they do not get the minimum percentage they require. My opinion is they will pull the offer & either sell their share holding or wait six months & make alower offer when F&P is even deeper in the sh*t

You got this one wrong, PTC - big time.

[pierre]

You got this one wrong, PTC - big time.


I agree with you Balance - The Cat is totally wrong on this one.

Haier wont want to lose face on this deal and right now have their abacuses (abaci?) at work figuring out the revised price they will have to offer to get it over the line.

[POSSUM THE CAT]

Balance that is what they said about BBG in Australia. That it was worth so much more. And who got Burnt. not this cat. I would not have touched F&P any time in the last ten years. Time will tell which of us is correct. And so far this cat has been right. It has been a long term losing trend. And I thought the Dreamers will stuff this takeover up so I stayed well clear.

[Balance]

Balance that is what they said about BBG in Australia. That it was worth so much more. And who got Burnt. not this cat. I would not have touched F&P any time in the last ten years. Time will tell which of us is correct. And so far this cat has been right. It has been a long term losing trend. And I thought the Dreamers will stuff this takeover up so I stayed well clear.

Good for you.

That's why there is a market.

[Anna Naum]

Trading Halt - Material announcement

[pierre]

Well - either Possum is correct and Haier are withdrawing their bid - or far more likely, an increase in the offer price is about to be announced.

Anyone want to take a punt on the new price - my pick is $1.34.

[The BOWMAN]

Could be another bid.

[winner69]

Could be another bid.

from somebody else?

[The BOWMAN]

from somebody else?
Precisely.

[CJ]

$1.32 (need more than 10 characters)

[Balance]

If they do not get the minimum percentage they require. My opinion is they will pull the offer & either sell their share holding or wait six months & make alower offer when F&P is even deeper in the sh*t

Meow?

You shorted any stock?

[macduffy]

Should we consider the possibility that Haier will re-affirm their bid of $1.20?

As a FPA holder I hope not, but that "63% higher than previous SP" carries a fair bit of weight.

[stoploss]

Should we consider the possibility that Haier will re-affirm their bid of $1.20?

As a FPA holder I hope not, but that "63% higher than previous SP" carries a fair bit of weight.

They already did that with the second ? letter they sent out......this says "material " so would expect something more meaningful than that .....

[macduffy]

They already did that with the second ? letter they sent out......this says "material " so would expect something more meaningful than that .....

Something like "have reconsidered our position and now bid $1.20 - our final offer." ?

Mere speculation on my part, but shouldn't be completely discounted.

[Balance]

Could be Bosch countering offer at $1.60?

Haier has played its hand by saying that the Independent Valuer's report is too high and too optimistic. Therefore, they are duty bound to accept a higher offer - otherwise, big loss of face.

[Xerof]

I read this in a newspaper, so it must be true....:t_up:


China's Haier is likely to announce a higher offer for Fisher & Paykel Appliances today and a lock-in agreement with major shareholders AMP and ACC, a market commentator says.

[POSSUM THE CAT]

Balance Haier Would be laughing all the way to the Bank. WhY do you think Bosch would be interested in buying such a Cr*ppy Appliance Manufacturer as F&P. Do some research on which is the most cr*ppy dishwasher in America. Sorry Balance my Broker does not allow shorting

[Balance]

Balance Haier Would be laughing all the way to the Bank. WhY do you think Bosch would be interested in buying such a Cr*ppy Appliance Manufacturer as F&P. Do some research on which is the most cr*ppy dishwasher in America. Sorry Balance my Broker does not allow shorting

CMC, that's where you go to short.

[stoploss]

$ 1.28 is the raised Haier bid

[Jay]

AMP and ACC entered in locked agreements to sell as long as Haier receive 50% od more.
Sold mine at 1.23 the other day as well, win some, win not quite as much some!
And - Independent Directors Change Recommendation to Accept Haier’s Increased Offer of $1.28 per share

[Xerof]

Well Sparky, if it's true that it's $1.28, plus AMP and ACC locked up, the rest will accept in droves

IMO

[pierre]

Haier now have 47.43% of FPA with ACC and AMP Capital locked in at that price - the deal is on so guess it's time to send in the acceptance then re-invest like Sparky has done.

[Balance]

Balance Haier Would be laughing all the way to the Bank. WhY do you think Bosch would be interested in buying such a Cr*ppy Appliance Manufacturer as F&P. Do some research on which is the most cr*ppy dishwasher in America. Sorry Balance my Broker does not allow shorting

Consider yourself very wrong about FPA/Haier and thank your lucky stars your broker is so hopeless he does not allow shorting.

Meow.

[quartzpurple]

it just goes to show how spineless these so-called professional directors are.

I can imagine the sorry faces of these directors begging the bidder to increase the price just high enough to reach the bottom of the valuation range in the closed door negotiation...

curious how Tower would react now?

[quartzpurple]

Exactly!

All these fund managers are just like the professional directors. It is not there money at stack.

http://www.nbr.co.nz/article/haier-bid-f-and-p-appliances-too-low-amp-capital-bd-130711

Just the other day, AMP said the offer is "TOO" low...i guess they just want a meager 6.7% more :)

[macduffy]

I think we should regard this as a pretty satisfactory outcome for shareholders, considering where the FPA SP was before the Haier bid. And fund managers were only doing their job in squeezing a few more cents out. Imagine the reaction of fund investors if the bid had collapsed and the SP had slumped back to around previous levels

[CJ]

I am pretty sure I read somewhere they have 50% so lets assume they get a least that but dont get anywhere near 90%.

What will the shareprice fall to? Should those considering holding onto their shares sell in and repurchase at a lower price or will the price stay high?

[POSSUM THE CAT]

Balance only you would be silly enough to deal with CMC

[Balance]

Balance only you would be silly enough to deal with CMC


I don't have a problem with them - only deal in liquid stocks and their bids/offers are same as that of ASX and NZX. Sure beats dealing with whoever is your broker who does not allow shorting and obviously shares your view about FPA!

Meow.

[Balance]

If they do not get the minimum percentage they require. My opinion is they will pull the offer & either sell their share holding or wait six months & make alower offer when F&P is even deeper in the sh*t

Meow.

What now, pussycat? Will Haier get to 100% or just above 50% and then, come back a year later for the balance?

Meow.

[POSSUM THE CAT]

Balance get a decent broker. One that does not try to bullsh*t you. Just tries to make trades at prices you set & does not try to rob you on Brokerage. Only you are so keen on following your brokers advice. I can make enough money by using my brain. Also suggest you get somebody with a brain to explain CMC terms of trade.

[Balance]

Balance get a decent broker. One that does not try to bullsh*t you. Just tries to make trades at prices you set & does not try to rob you on Brokerage. Only you are so keen on following your brokers advice. I can make enough money by using my brain. Also suggest you get somebody with a brain to explain CMC terms of trade.

And your views and stance on FPA is indicative of your investment credentials?

Brokerage is cheap if you get good advice and good service.

Any brokerage is expensive if you get lousy advice and service.

Happy to stick with mine.

Meow.

[POSSUM THE CAT]

Balance my views have kept me out of F&P for the last 10 years & 12% return so far this year. On total wealth even after supplementing my Super is I think very reasonable. So I am quite satisfied with my broker that I have had for many years. Even traded the Australian Market Through this NZ broker far more efficient than Commsec.

[pierre]

And your views and stance on FPA is indicative of your investment credentials?
Meow.

I'm with you Balance. I think poor old Possum the Cat just can't get over the fact that he missed out on FPA. His response is to rubbish the company and its products as well the Brokers (not his) who recommended FPA as an investment.

Maybe The Cat has lost eight of his nine investment lives as a consequence and is now feeling pretty vulnerable, as well as very upset, angry and bitter.

Meanwhile, I'm pondering where to invest the $256k proceeds coming from the sale. Wish I knew the name of Possum's broker - so I don't go to them for advice.

Purrrrr

[POSSUM THE CAT]

Pierre I take it you are French & do not understand English. What do you not understand MY Broker does not give any advice they think if you are investing through them you have enough Brains to make your own decisions. Sorry I cannot put this into French for you. But you can use a French/English Dictionary if that is not to far above your intellect. And I notice you do not state the profit so I assume it was quite a loss

Meow Purr

[macduffy]

These posts are getting quite catty! How about a few more purrs and less snarls?

(Sorry about that)

:)

[RRR]

PTC is just having fun I think. ASB/Morningstar has valuation of $1.00 for FPA - I just don't get it. If one sells on the market, it is still 27% more than their their target price! Can some one please explain in plain English why they have such a low target - are they serious!

[pierre]

Pierre I take it you are French & do not understand English. What do you not understand MY Broker does not give any advice they think if you are investing through them you have enough Brains to make your own decisions. Sorry I cannot put this into French for you. But you can use a French/English Dictionary if that is not to far above your intellect. And I notice you do not state the profit so I assume it was quite a loss

Meow Purr

Non non Possum - je suis un Kiwi! And I make my own investment decisions too. I did post on here some time back that I bought 200,000 FPA a couple of years ago at 61cps - expecting some action sooner than it actually happened.

I held on (nervously) while the price plunged to about 34cents and am now very happy with the gain of 109% on my initial outlay - hence the "purrr".

I'm also happy with the F&P appliances that we purchased for our new home and only hope that Haier does nothing to diminish the quality standards that FPA has established.

[Eclipse]

Well first of all will be interesting to see how many of the smaller shareholders sell their shares especially those holding long term seeing there shares above $2.10 just a few years back (not too long in the scheme of a long running business).
Especially to see if the directors put their shares where there mouth is stating to sell their shares... They would be the best to tell whether they think Haier will be purchasing incrementally after the takeover.

As for the proceeds I'm intending to invest in Australia, not too much in the NZX at the moment that seems attractive even with Aus franking credits and the exchange rate risk.
Anyone got a inkling of a NZ company to research?

[Hoop]

Non non Possum - je suis un Kiwi! And I make my own investment decisions too. I did post on here some time back that I bought 200,000 FPA a couple of years ago at 61cps - expecting some action sooner than it actually happened.

I held on (nervously) while the price plunged to about 34cents and am now very happy with the gain of 109% on my initial outlay - hence the "purrr".

I'm also happy with the F&P appliances that we purchased for our new home and only hope that Haier does nothing to diminish the quality standards that FPA has established.

Alway glad to see success storys on ST and how they managed to do it through thick and thin...Pierre your buy and hold strategy had its worrying moments..eh?

Sticking to one's discipline is the major key to success. Although long term buy and hold strategy is not my preferred choice in this current environment..it is still very pleasing to see others using it and walking away with great success.

Well done Pierre!!..I'm envious, as I wish I had half the self-discipline you have

[pierre]

Alway glad to see success storys on ST and how they managed to do it through thick and thin...Pierre your buy and hold strategy had its worrying moments..eh?

Sticking to one's discipline is the major key to success. Although long term buy and hold strategy is not my preferred choice in this current environment..it is still very pleasing to see others using it and walking away with great success.

Well done Pierre!!..I'm envious, as I wish I had half the self-discipline you have


Thanks Hoop. Watching the price slump wasn't exactly the action I was looking for - but I always felt that the innovation that had served FPA well in the past - and the 20% holding of Haier would eventually result in a takeover. I've always invested with a long-ish view and don't want to pay tax as a trader.

The next game to be played is with Tower. I've already enjoyed substantial gains from them splitting their Aussie business into TAL which was then taken over by Dai-ichi (Japan) a year or two back. I've watched my TWR shares drop below my cost price too over the past year or so - but they're back on track again. I'm now waiting for what they'll announce early next year following their strategic review - especially now that Michael Stiassny has been appointed to the Board.

It's far from easy riding the waves at times - but it's a strategy that has worked pretty well for me over the years.

[POSSUM THE CAT]

Pierre I was thinking also of getting back into Tower but after the Announcements in the last few days. I would not touch it with a Barge Pole. The New Board member is a signal to me to Run like hell. I would love them to kick him off the VECTOR Board

[Balance]

Pierre I was thinking also of getting back into Tower but after the Announcements in the last few days. I would not touch it with a Barge Pole. The New Board member is a signal to me to Run like hell. I would love them to kick him off the VECTOR Board

Great!

I am in and bought more Tower this morning!

My contrarian watch signal, PTC, just flashed 'BUY' on Tower!

Thanks, matey.

[pierre]

We should probably now be discussing this on the TWR thread. But I'm sure Stiassny is there to shake things up a bit - to get their "strategic review" completed and into action. Options seem to be a capital return or a merger or takeover of some kind though their cards are being held close at the moment. Whatever the deal is - I'm sure there's quite a bit of value in it for shareholders.

[Balance]

We should probably now be discussing this on the TWR thread. But I'm sure Stiassny is there to shake things up a bit - to get their "strategic review" completed and into action. Options seem to be a capital return or a merger or takeover of some kind though their cards are being held close at the moment. Whatever the deal is - I'm sure there's quite a bit of value in it for shareholders.

Agreed!

And PTC has just given the 'BUY' signal!

[Lizard]

Sat down to make a decision today on whether to accept, sell on market or hold. Thought I should check what conditions still apply and likely timeframe to become unconditional and timeframe to payout... pulled out the letter received today and thought it might be quicker to call the "Fisher & Paykel Appliances Shareholder Information Line"... but hey, turns out it's the "Fisher & Paykel Customer Care" line and no options to select for shareholders except "talk to a Customer Care representative" (didn't bother).

[POSSUM THE CAT]

Lizard surely you did not expect anything better from F&P.

[macduffy]

Sat down to make a decision today on whether to accept, sell on market or hold. Thought I should check what conditions still apply and likely timeframe to become unconditional and timeframe to payout... pulled out the letter received today and thought it might be quicker to call the "Fisher & Paykel Appliances Shareholder Information Line"... but hey, turns out it's the "Fisher & Paykel Customer Care" line and no options to select for shareholders except "talk to a Customer Care representative" (didn't bother).

The Offer specified payment to be made no later than 7 days after the later of: The date acceptance form received by Haier; the date offer becomes unconditional;the Closing Date.

The revised offer specified that all terms other than the price remain as set out in the Offer document.

There must be a chance though that Haier will extend the offer to "capture" slow movers, thus delaying payment.

FWIW, I've decided to accept but will keep an open mind about buying back in if the shares remain listed.

[RRR]

I have accepted the offer!

[Lizard]

Yes, thanks MacDuffy - I had a look at the conditions and couldn't guess how long until payment would come through, so decided to sell on market and presume that I can put the money to work elsewhere to make up the small discount and brokerage. I think the risk of increased offer (which would mean I have sold at additional discount) is small now.

[Eclipse]

Some F&P investors balk at Haier offer As Chinese company Haier's ownership of Fisher & Paykel Appliances creeps over 56 per cent, speculation is emerging of a sizeable group of holdouts against the takeover.

Haier has offered $1.28 a share for all of F&P Appliances, the bottom end of an independent valuation of $1.28 to $1.57 produced for the board by consultancy Grant Samuel.
The offer, supported by the board, closes on November 6 and several big shareholders have accepted, including ACC, AMP and Harbour Asset Management.
But a market source said some may refuse to sell.
"One of the discussions we're hearing is there's probably going to be a bloc of 15-25 per cent hold on in there," he said.
Some investors saw more value in the company's intellectual property and were prepared to hold on to their shares until that value was realised, the source said.
With Haier requiring 100 per cent ownership to freely access F&P's technology, the Chinese company would not be comfortable as merely a majority owner of a listed business.
"I think they'll be in real trouble if they don't get 100 per cent."
Another market source poured cold water on the prospect of a holdout.
"We'll see," he said. "It is entirely possible people will try to engineer something better for themselves. I'm not convinced that's a valid thesis."
F&P Appliances shares were trading at $1.265 on market yesterday, valuing the company at $916 million.
[B] - © Fairfax NZ News
http://www.stuff.co.nz/business/industries/7870489/Some-F-P-investors-balk-at-Haier-offer

[Eclipse]

Shareholders Assoc sounds Haier warning The Shareholders Association has warned members considering Haier's Fisher & Paykel Appliances offer of the risks of being a minority shareholder.

Concerns about losing the iconic Kiwi company are "just sentiment", it said.
Haier now owns 55.86 per cent of FPA, according to its latest update to the NZX. The Chinese whiteware giant upped its original offer of $1.20 a share to $1.28 last week after a report by independent adviser Grant Samuel valued FPA at between $1.28 and $1.57.
That was enough to prompt several institutional shareholders, including ACC and AMP Capital, to sell and pushed Haier's shareholding above 50 per cent - Haier's minimum target.
The Association's chairman John Hawkins said in a letter to members that it could not by law give financial advice but wanted to set out some issues for them to consider.
Becoming minority shareholders could be risky if Haier did not get over 90 per cent which would trigger a full takeover, he said.
Directors appointed by large shareholders had an inherent conflict of interest, as they were supposed to act both in the best interests of the company but also in the best interests of their employer.
Haier could run FPA very differently to local owners, he said.
"They may or may not be concerned with achieving good dividends and/or capital growth. For example, Haier may be quite happy for FPA to effectively become a centre of research and development where profit is not the key objective."
Hawkins said the share price could fall once the takeover period finished, as there would be fewer shares available and less interest in them. FPA could also drop out of the NZX50, meaning a number of institutions would no longer be able to buy shares - reducing demand and price.
"Some people are concerned that they don't want to lose an iconic New Zealand company. In our view that is just sentiment and not a business decision."
Hawkins said some shareholders might be hanging on in the hope Haier would up its offer in future, but the likelihood of that was small as 'mopping up' bids would not need to include a premium for gaining control.
Those shareholders who felt FPA had a future as a listed company could sell at the takeover price and buy back shares at a lower price, he said.
Shareholders could also consider reducing rather than completely selling their stake. That would reduce future risk but still leave them exposed as minority shareholders.
Hawkins said FPA shareholders should seek advice from their financial adviser or share broker.
Those accepting the offer needed to have the forms in by 5pm on November 6.
Tower Investments, a minority shareholder, said this week it was still weighing up the offer.
Chief executive Sam Stubbs, who criticised Haier's original offer as "a steal", said it was disappointed Haier's second offer was right at the bottom of Grant Samuel's range, and would probably not decide whether to sell until on or just before November 6.
- © Fairfax NZ News
http://www.stuff.co.nz/business/industries/7867797/Shareholders-Assoc-sounds-Haier-warning

[pierre]

The Haier deal is now unconditional and the shares are selling at 127.5 as I write.

Sellers of 3 million + are asking 128 while buyers of 4.5 million are offering 127.5 - and there are buyers of another 16 million waiting at 127.

What gives - it surely can't be worth dealing for a half cent margin plus brokerage?

[CJ]

What gives - it surely can't be worth dealing for a half cent margin plus brokerage?Now that it is unconditional what is the timetable? Accept and you get paid in 7 working days?

With ASB Securities charging 0.3% once your over the minimum trade, you would be making 0.1c on each share less finance costs. So on $4.5m, you would make about $4.5k less finance costs though you may be able to negotiate a lower brokerage to take your profit to $22.5k on T/O of $5.7m.

Edit: I assume Haier isn't allowed to buy on market now? Or maybe they have agreements with the big hedge funds to settle quicker and share the saved admin costs of processing 1,000s of small payments?

[Xerof]

If you accept by the closing date, you get paid in full on or before 13 Nov, that being the latest of three possible dates (see offer doc)

when I last looked, they can extend the closing date, but I think they have to give a weeks notice. Someone will correct me if thats wrong. This means if no extension done by tonight, thats it.

the buyers are grabbing what they can to keep acceptances under 90% IMO, to play the hard to get card later on

[Xerof]

Haier are not able to buy on-market, and I would think they would play a straight bat in that regard.

Hedge funds would not bother to act as transitories for so little margin, and anyway, I think you'll find they are the buyers, with a view to frustrate, not assist

[CJ]

Haier are not able to buy on-market, and I would think they would play a straight bat in that regard.

Hedge funds would not bother to act as transitories for so little margin, and anyway, I think you'll find they are the buyers, with a view to frustrate, not assistIf you were trying to frustrate, wouldn't you just offer up an extra 0.5c over the $1.28. Your already spending a lot of money for a share that was previously worth 50% less, why not stump up the extra cash. Maybe they are seeing if they can flush any out at the lower price before raising next week?

[pierre]

Would you like rice with that?

Haier has F&P all wrapped up with 92.79%.

[Jaa]

Would you like rice with that?

Haier has F&P all wrapped up with 92.79%.

Well that will save me some paperwork....

Does anyone know if they just deposit the money into your bank account? If so, how long does it take?

[macduffy]

Well that will save me some paperwork....

Does anyone know if they just deposit the money into your bank account? If so, how long does it take?

Payment to be made 7 days after the Closing Date. With 90% reached there shouldn't be any delay to that.

[pierre]

If you've completed and sent the acceptance form you'll be paid within seven days (direct to your bank if you've given them the account number).

If you haven't accepted they will write to you telling you that they are going to compulsorily acquire your shares under the Takeover Code. I'm not sure how long that process and payment will take - but I'm guessing there will be some delay while they go through the legalities involved.

[CJ]

If you've completed and sent the acceptance form you'll be paid within seven days (direct to your bank if you've given them the account number).

If you haven't accepted they will write to you telling you that they are going to compulsorily acquire your shares under the Takeover Code. I'm not sure how long that process and payment will take - but I'm guessing there will be some delay while they go through the legalities involved.I would send in the paper work if you haven't. If they try to compulsorily acquire your shares, there must be a bit of a process as you could object, seek a further valuation, object again ..... trying to get 'fair value' for your shares.

Accept the offer and you will be paid within 7 days.

[Balance]

Would you like rice with that?

Haier has F&P all wrapped up with 92.79%.

Chop suey time soon.

[garfy]

When the money is in the bank there ends a very interesting, and of course enjoyable venture into the NZX. Have enjoyed reading the correspondence in this, and other, threads, and wish to say that I have learned much from the comments, explanations, graphs, and harangues contained within. A 'watching brief' at this stage. My 'Bookmark' of choice. Many thanks.

Garfy

[Balance]

See everyone over at the PGW thread where there is a sense of deja vu:

- a well established company savaged before and during the GFC thanks to the hubris of arrogant NZ directors and management taking on debt and making bad decisions
- a clearing out of those same directors and management
- that same company painstakingly paying back debt and turning the business back in the right direction
- a significant Chinese stakeholder (but one who is not well positioned like Haier)
- a company priced at very low levels representing a deep value play

Sad to see F&P lose its independence, but that's business I guess. Thanks to all who participated in this thread, which will hopefully live on and hopefully be a source of info to a business historian.

Sad to see F&P go but the whole saga is damning of two things about NZ:

1. Like Fletcher, Carter Holt, Wilson & Horton etc - management were not up to the task of internationalizing the company. Should take a leaf out of the Australians, Singaporeans etc and brought in world class management from overseas.

2. Billions of $ into finance companies down the drain with nothing to show for the waste save a few fat cats and a few directors in jail - a fraction of that money into FPA or PGW would have rescued both companies and kept them in NZ's control.

Sad, very very sad for NZ and future generations.

[macduffy]

I share your sentiments, Balance. Brian Gaynor blames a lack of capital in NZ and to be fair to FPA management they did have more than their share of bad luck in timing the move to offshore manufacturing. The sad fact is that NZ manufacturing costs aren't competitive with low wage economies and FPA's moves were forced on them to a large degree.

Interesting that Australia is in the same boat with their companies also subject to overseas takeover attack on a regular basis eg the current bid for ARI; the need for heavy state subsidising of the automotive and steel industries etc. The difference is that Aust has many more listed companies than NZ but many Australians deplore the loss of their businesses as much as we do.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10845575

[elZorro]

Sad to see F&P go but the whole saga is damning of two things about NZ:

1. Like Fletcher, Carter Holt, Wilson & Horton etc - management were not up to the task of internationalizing the company. Should take a leaf out of the Australians, Singaporeans etc and brought in world class management from overseas.

2. Billions of $ into finance companies down the drain with nothing to show for the waste save a few fat cats and a few directors in jail - a fraction of that money into FPA or PGW would have rescued both companies and kept them in NZ's control.

Sad, very very sad for NZ and future generations.

I agree with that Balance. What we had there was smart volume manufacturing, good IP. The NZ market undervalued it, and the current govt had its thoughts elsewhere. F&P never caused the public millions in losses, and they have been an important part of our culture. They certainly deserved more central govt support, and it would have been cashflow positive.

Now we'll have to wait the 10-20 years (or longer) for a similar business to build up to that sort of level, to mop up manufacturing and design expertise.

[CJ]

and the current govt had its thoughts elsewhere. ... [FPA] have been an important part of our culture. They certainly deserved more central govt support, and it would have been cashflow positive.

What should the government have done?? Nationalise FPA? Force the Cullen fund to buy a blocking shareholding.

[Keep your answer to FPA or other NZ listed companies. Everyone knows the finance company bailouts etc were a balls up]

[elZorro]

What should the government have done?? Nationalise FPA? Force the Cullen fund to buy a blocking shareholding.

[Keep your answer to FPA or other NZ listed companies. Everyone knows the finance company bailouts etc were a balls up]

CJ, I refer you back to a post by Balance (http://www.sharetrader.co.nz/showthread.php?1163-FPA-Chart&p=381590&viewfull=1#post381590). You were reading the thread back there, weren't you? Don't let facts get in the way of a good argument.

It's like a ladder, the govt hopefully provides direction and a small grant for the first step. The business does the rest.

[Balance]

CJ, I refer you back to a post by Balance (http://www.sharetrader.co.nz/showthread.php?1163-FPA-Chart&p=381590&viewfull=1#post381590). You were reading the thread back there, weren't you? Don't let facts get in the way of a good argument.

It's like a ladder, the govt hopefully provides direction and a small grant for the first step. The business does the rest.

Thanks, elZorro.

This is the tragedy for NZ that successive governments after the Stalinist control economic policies of the Muldoon years have followed the free market fiscal and tax neutral policies preached by Treasury - even Labor governments.

What they ignore is that the world out there is not a level playing field and we have to be mindful of keeping jobs (good ones) for future generations. You can only do that by retaining industries and companies in NZ.

Think of all the good jobs which have disappeared from NZ with the sale off of our banks (BNZ, Trust Bank, ASB, Countrywide etc), forestry companies (Carter Holt, Fletcher Forests, Fletcher Forests etc), property companies (St Lukes Group) etc. These companies not only employ New Zealanders in key executive positions in NZ and around the world, they also provide good entry level jobs for university and tertiary education graduates.

All companies stumble from time to time - even the most valuable company in the world now, Apple. They need a helping hand and that can come by way of some government assistance - Air NZ being a case in point.

Is NZ the poorer or richer for Air NZ bing bailed out?

I fear for the future of the youth of New Zealand.

But I guess they will all turn to Australia or in the case of the growing Asian youth in NZ, Asia for their future.

Sad, very sad.

[Balance]

Only in NZ do you have pimpled-faced Treasury staff making free market policies without consideration of the benefits of employment and the good of the social fabric of the nation.

I had a chat with a senior FPA executive a few years ago and they gave up talking with the NZ government (be them Labour or National) about the need for NZ to provide real incentives to site high-tech manufacturing plants in NZ. For the sake of $15m in incentives, FPA had no choice but to move one of its plants offshore.

There was no bitterness in the voice of the executive - just resignation that a government cannot see the benefit of keeping jobs in NZ.

What is $15m when you consider the NZ government spends that in hours of social welfarism every day!

This is the posting that elZorro was referring to.

Those of you who have dealt with those pimpled faced kids in Treasury know what I mean.

So what we have is the NZ government pursuing interventionist social policies (social welfare payments by the billions of dollars) but when it comes to economic matters, a complete hands off free market policy!

And is is the economic entities which have to deliver the billions of dollars to feed the social welfare industry!

[BIRMANBOY]

How can you possibly believe that somehow NZ Mfrs can compete globally while paying our workers such high (in comparison to Mexico, China etc) wages. Throwing subsidy govt. money at it is just a waste of money (your taxes) and will have no benefit other than prolonging the inevitable outcome. Quite rightly its up to the business entrepeneurs and business owners to find the best way of competing. We will never be a base for high worker component manufacturing. Its just naive to hold on to this concept. Unless you can agree to work for $2 to $3 per day of course...thats the least you can do for your country.
This is the posting that elZorro was referring to.

Those of you who have dealt with those pimpled faced kids in Treasury know what I mean.

So what we have is the NZ government pursuing interventionist social policies (social welfare payments by the billions of dollars) but when it comes to economic matters, a complete hands off free market policy!

And is is the economic entities which have to deliver the billions of dollars to feed the social welfare industry!

[Balance]

How can you possibly believe that somehow NZ Mfrs can compete globally while paying our workers such high (in comparison to Mexico, China etc) wages. Throwing subsidy govt. money at it is just a waste of money (your taxes) and will have no benefit other than prolonging the inevitable outcome. Quite rightly its up to the business entrepeneurs and business owners to find the best way of competing. We will never be a base for high worker component manufacturing. Its just naive to hold on to this concept. Unless you can agree to work for $2 to $3 per day of course...thats the least you can do for your country.

Nobody is dumb enough to believe that NZ mfrs can compete against low wages as in Mexico, China or Thailand.

It is about brand positioning, productivity and it is about efficiency. Otherwise, Bosch would have shifted all of its operations to Asia or Mexico a long time ago - but it does not. Guess why?

Go back to my earlier post about how $15m could have changed FPA's decision to manufacture in NZ.

[Balance]

How can you possibly believe that somehow NZ Mfrs can compete globally while paying our workers such high (in comparison to Mexico, China etc) wages. Throwing subsidy govt. money at it is just a waste of money (your taxes) and will have no benefit other than prolonging the inevitable outcome. Quite rightly its up to the business entrepeneurs and business owners to find the best way of competing. We will never be a base for high worker component manufacturing. Its just naive to hold on to this concept. Unless you can agree to work for $2 to $3 per day of course...thats the least you can do for your country.

Nobody is dumb enough to believe that NZ mfrs can compete against low wages as in Mexico, China or Thailand.

But wages are but one input into the overall cost of production of any product.

If wages are the sole determinant, Bosch would have shifted all of its operations to Asia or Mexico a long time ago - but it does not. Singapore, which is a major manufacturing hub in SEA, would have shut down all of its manufacturing over the last 10 years.

But they have not - guess why?

It is about brand positioning, productivity and it is also about scale and efficiency.

It is also about proactive and progression government providing a range of measures to assist businesses and manufacturers. Tax incentives, R&D support, exchange rate management (ever heard of currency peg?), apprenticeships etc etc etc.

Definitely the current corrosive devoid of brain matter free market pimpled faced driven ideology from Treasury.

Guess why we do not have any real local bank (bye bye BNZ, Trust Bank, ASB, Countrywide, etc) but hi, heaps of finance companies which went broke? Rock on, free market and closing the door after the horses have bolted.

Go back to my earlier post about how $15m could have changed FPA's decision to manufacture in NZ. With but less than what the government pays out now in social welfare payments in but a few hours, FPA would have created more jobs in NZ, given FPA more scale and the jobs would have paid taxes etc.

Be afraid, be very afraid for NZ's future.

[elZorro]

I have to agree with that too, Balance. NZ should stick to niche areas, away from consumer products (but if we do have a go at those, they need to be among the very best on offer). To simply hold up your hands, BB, and say it's too hard, is not what R&D and manufacturing is all about. Anything a govt would grant business is not going to provide a subsidy, it's simply a carrot to get the market to move in the required direction. With the clear understanding that manufacturing should stay over here.

One of the biggest homes in Hamilton is being built by a manufacturing business owner. He makes trailers. But these trailers are huge low-slung jobs for heavy loads, with multiple axles. Exported worldwide. I would imagine that this business employs many workers with a wide range of skills, and freight issues are overcome by the value of the goods. This business has almost certainly used govt part-grants for some of their R&D, and would have used Trade & Enterprise. You tell me, was it a net waste of taxpayers' money?

[Balance]

I have to agree with that too, Balance. NZ should stick to niche areas, away from consumer products (but if we do have a go at those, they need to be among the very best on offer). To simply hold up your hands, BB, and say it's too hard, is not what R&D and manufacturing is all about. Anything a govt would grant business is not going to provide a subsidy, it's simply a carrot to get the market to move in the required direction. With the clear understanding that manufacturing should stay over here.

One of the biggest homes in Hamilton is being built by a manufacturing business owner. He makes trailers. But these trailers are huge low-slung jobs for heavy loads, with multiple axles. Exported worldwide. I would imagine that this business employs many workers with a wide range of skills, and freight issues are overcome by the value of the goods. This business has almost certainly used govt part-grants for some of their R&D, and would have used Trade & Enterprise. You tell me, was it a net waste of taxpayers' money?

Hear hear, elZorro.

The government has a very important role to play to build and maintain businesses and companies in NZ. It is about providing incentives and motivations to steer economic activities in the right direction.

The sad fact is that successive governments are very very good at providing incentives and signals in the social areas - eg. DPB (produce plenty babies for solo Mums), Working for Family (if you are rich, hide your wealth in family trusts) and state housing (state tenants living in million dollar houses for free).

But when it comes to economic activity? Big fat nothing of consequence!

Contrast what happened with BNZ with Westpac.

Both got into severe financial difficulties after the share market crash of 1987.

Westpac was bailed out and an experienced banker brought in from overseas to run the bank and restored it to health.

BNZ was bailed out but was sold to NAB.

Where is Westpac today compared to NAB?

The BNZ today is but a branch operation of NAB with little autonomy to make loans and contribute to the growth and health of the NZ Economy.

Think of Air NZ and how that would have played out if the government had simply sold Air NZ to Qantas?

What is extremely disturbing for the youth and future generations of New Zealanders is how, we have a government standing aside but was happy to bail out billions of dollars due to the gross mismanagement of the finance companies! No questions asked!

[JMKC]

[QUOTE=Balance;384760]Nobody is dumb enough to believe that NZ mfrs can compete against low wages as in Mexico, China or Thailand.

But wages are but one input into the overall cost of production of any product.

If wages are the sole determinant, Bosch would have shifted all of its operations to Asia or Mexico a long time ago - but it does not. Singapore, which is a major manufacturing hub in SEA, would have shut down all of its manufacturing over the last 10 years.

But they have not - guess why?

It is about brand positioning, productivity and it is also about scale and efficiency.

It is also about proactive and progression government providing a range of measures to assist businesses and manufacturers. Tax incentives, R&D support, exchange rate management (ever heard of currency peg?), apprenticeships etc etc etc.
QUOTE]

This, is complete rubbish. I'm sorry, but we all know the tax breaks that Singapore is offering for foreign compaines/investment. So quoting SGP as a shining light is irrelevant.

What is the point of offering NZ manufacturers concessions to manufacture goods in an uneconomic fashion?

FPA is not an iconic NZ brand anymore than RAK, and there is no nationalistic defence of their business.

While we're on Bosch...where is their primary stock exchange listing? India. Where do they have their biggest employment base? India (18,450 people according to Wikipedia...oh and second largest is Brazil, that other high cost of employment base...wait 3rd biggest base is China with 12,370).

And elZorro, there is a MASSIVE difference between R&D and manufacturing. I think it is fantastic that this Hamilton business is succeeding with the value of their goods. The reality is, FPA isn't.

[Balance]

[QUOTE=Balance;384760]Nobody is dumb enough to believe that NZ mfrs can compete against low wages as in Mexico, China or Thailand.

But wages are but one input into the overall cost of production of any product.

If wages are the sole determinant, Bosch would have shifted all of its operations to Asia or Mexico a long time ago - but it does not. Singapore, which is a major manufacturing hub in SEA, would have shut down all of its manufacturing over the last 10 years.

But they have not - guess why?

It is about brand positioning, productivity and it is also about scale and efficiency.

It is also about proactive and progression government providing a range of measures to assist businesses and manufacturers. Tax incentives, R&D support, exchange rate management (ever heard of currency peg?), apprenticeships etc etc etc.
QUOTE]

This, is complete rubbish. I'm sorry, but we all know the tax breaks that Singapore is offering for foreign compaines/investment. So quoting SGP as a shining light is irrelevant.

What is the point of offering NZ manufacturers concessions to manufacture goods in an uneconomic fashion?

FPA is not an iconic NZ brand anymore than RAK, and there is no nationalistic defence of their business.

While we're on Bosch...where is their primary stock exchange listing? India. Where do they have their biggest employment base? India (18,450 people according to Wikipedia...oh and second largest is Brazil, that other high cost of employment base...wait 3rd biggest base is China with 12,370).

And elZorro, there is a MASSIVE difference between R&D and manufacturing. I think it is fantastic that this Hamilton business is succeeding with the value of their goods. The reality is, FPA isn't.

All companies go through ups and downs. What we are seeing with FPA is that their operations are turning around.

It's as simple as that.

If we rely on your logic, farming in NZ would have been stopped 30 years ago! Farming had to be bailed out by the government at that time.

Now who is talking rubbish?

[elZorro]

JMKC: This, is complete rubbish. I'm sorry, but we all know the tax breaks that Singapore is offering for foreign companies/investment. So quoting SGP as a shining light is irrelevant.

What is the point of offering NZ manufacturers concessions to manufacture goods in an uneconomic fashion?

FPA is not an iconic NZ brand anymore than RAK, and there is no nationalistic defence of their business.

While we're on Bosch...where is their primary stock exchange listing? India. Where do they have their biggest employment base? India (18,450 people according to Wikipedia...oh and second largest is Brazil, that other high cost of employment base...wait 3rd biggest base is China with 12,370).

And elZorro, there is a MASSIVE difference between R&D and manufacturing. I think it is fantastic that this Hamilton business is succeeding with the value of their goods. The reality is, FPA isn't.

Isn't Bosch making mostly consumer goods? Their technical products can and should be made in higher waged economies. Yes, I'm well aware of the difference between R&D and manufacturing. For a place like NZ, R&D saves manufacturing jobs. Without it (using a continuous refinement), NZ manufacturers outside of niche markets will get taken out by cheaper suppliers. The speed of this process is helped along by the internet.

Maybe we could be an R&D hub for overseas manufacturers, but who will employ our vastly bigger group of technical trade people and manufacturing floor workers? Manufacturing can be placed close to suburbia, is very compact, and often has low impact on the environment, and it's not uncommon for profitable manufacturing to provide revenue of $100 an hour per person. So manufacturers can pay good wages, and therefore, they will channel taxes into the system.

From an engineering perspective, FPA has designed and built some incredible equipment, the firm is bristling with patents that are a glistening prize for Haier. In the mass market game, sales channels are needed to complement good products. FPA was held back in some of those. The end result we're seeing is no reflection on the great work of the skilled F&P engineers who built up the business over the years.

[BIRMANBOY]

Any business involved in trying to export its products or services has to be aware of its strengths and weaknesses and react accordingly. If you compare your products to overseas producers and you are falling short in selling price then it would be foolhardy to continue unless you can close the price gap somehow or have an advantage in value added areas such as more bells and whistles as an example. High Tech products that involve highly skilled(paid) labour are presumably not as vulnerable. The important factor is recognition of where the organization fits. Distinction should be made between those with hope and those that are hopeless. Just saying the Govt is turning its back on deserving companies is too simplistic. If a company has to move its operation overseas to stay competitive that tells the story right there. What we should be doing is supporting the endeavors of outfits that have a chance and a real possibility of making it. Supporting iconic companies just because they employ Kiwis is emotionally satisfying but financially unviable. Targeted Govt support is welcomed but throwing money at a lost cause is futile. Unfortunately NZ is in a difficult position...the only thing we are good at, and always have been is in food and dairy production. There are other examples of successes obviously but trying to subsidize and promote no-hopers is just silly. We have to be smarter, fitter and leaner to survive globally. Creating jobs is good but creating the right jobs for the right circumstances is infinitely better and more enduring.
Nobody is dumb enough to believe that NZ mfrs can compete against low wages as in Mexico, China or Thailand.

But wages are but one input into the overall cost of production of any product.

If wages are the sole determinant, Bosch would have shifted all of its operations to Asia or Mexico a long time ago - but it does not. Singapore, which is a major manufacturing hub in SEA, would have shut down all of its manufacturing over the last 10 years.

But they have not - guess why?

It is about brand positioning, productivity and it is also about scale and efficiency.

It is also about proactive and progression government providing a range of measures to assist businesses and manufacturers. Tax incentives, R&D support, exchange rate management (ever heard of currency peg?), apprenticeships etc etc etc.

Definitely the current corrosive devoid of brain matter free market pimpled faced driven ideology from Treasury.

Guess why we do not have any real local bank (bye bye BNZ, Trust Bank, ASB, Countrywide, etc) but hi, heaps of finance companies which went broke? Rock on, free market and closing the door after the horses have bolted.

Go back to my earlier post about how $15m could have changed FPA's decision to manufacture in NZ. With but less than what the government pays out now in social welfare payments in but a few hours, FPA would have created more jobs in NZ, given FPA more scale and the jobs would have paid taxes etc.

Be afraid, be very afraid for NZ's future.

[Balance]

Any business involved in trying to export its products or services has to be aware of its strengths and weaknesses and react accordingly. If you compare your products to overseas producers and you are falling short in selling price then it would be foolhardy to continue unless you can close the price gap somehow or have an advantage in value added areas such as more bells and whistles as an example. High Tech products that involve highly skilled(paid) labour are presumably not as vulnerable. The important factor is recognition of where the organization fits. Distinction should be made between those with hope and those that are hopeless. Just saying the Govt is turning its back on deserving companies is too simplistic. If a company has to move its operation overseas to stay competitive that tells the story right there. What we should be doing is supporting the endeavors of outfits that have a chance and a real possibility of making it. Supporting iconic companies just because they employ Kiwis is emotionally satisfying but financially unviable. Targeted Govt support is welcomed but throwing money at a lost cause is futile. Unfortunately NZ is in a difficult position...the only thing we are good at, and always have been is in food and dairy production. There are other examples of successes obviously but trying to subsidize and promote no-hopers is just silly. We have to be smarter, fitter and leaner to survive globally. Creating jobs is good but creating the right jobs for the right circumstances is infinitely better and more enduring.

FPA is not a no-hoper.

It is a company with a proud history of innovation and a generator of wealth for New Zealanders.

It has gone through many ups and downs in the last 50 years but had continued to be an excellent employer of new graduates and provide training for many thousands of New Zealanders.

It stumbled, needed recapitalisation but is now on the road to recovery.

Does that not tell you it is a company and business worthy of government support?

What's $15m to the government? 5 hours of useless social welfare spending and 10% of the treaty-cringe Maori TV budget.

To FPA and NZ, it means hundreds of jobs and a return of many hundreds of % for NZ in terms of additional tax revenues, real social benefits etc.

But Treasury is right of course - all companies and businesses must stand on their own two feet - unless they are finance companies, of course.

[BIRMANBOY]

You can wave the flag all you want..in this world people are only interested in waving money. Get used to it.
FPA is not a no-hoper.

It is a company with a proud history of innovation and a generator of wealth for New Zealanders.

It has gone through many ups and downs in the last 50 years but had continued to be an excellent employer of new graduates and provide training for many thousands of New Zealanders.

It stumbled, needed recapitalisation but is now on the road to recovery.

Does that not tell you it is a company and business worthy of government support?

What's $15m to the government? 5 hours of useless social welfare spending and 10% of the treaty-cringe Maori TV budget.

To FPA and NZ, it means hundreds of jobs and a return of many hundreds of % for NZ in terms of additional tax revenues, real social benefits etc.

But Treasury is right of course - all companies and businesses must stand on their own two feet - unless they are finance companies, of course.

[Balance]

You can wave the flag all you want..in this world people are only interested in waving money. Get used to it.

I have no problem with people waving money.

In fact, I LOVE it!

But I have a real problem with the government throwing money at hopeless cases like social welfare beneficiaries and finance companies.

You savvy?

[BIRMANBOY]

To Clarify...not using "no-hoper" in the colloquial sense as useless good for nothing but in the strict sense as being there being no hope for prospects of success. FPA did what they could for as long as they could as well as they could....kudos to them. But eventually circumstances and the global financial realities caught up with them
FPA is not a no-hoper.

It is a company with a proud history of innovation and a generator of wealth for New Zealanders.

It has gone through many ups and downs in the last 50 years but had continued to be an excellent employer of new graduates and provide training for many thousands of New Zealanders.

It stumbled, needed recapitalisation but is now on the road to recovery.

Does that not tell you it is a company and business worthy of government support?

What's $15m to the government? 5 hours of useless social welfare spending and 10% of the treaty-cringe Maori TV budget.

To FPA and NZ, it means hundreds of jobs and a return of many hundreds of % for NZ in terms of additional tax revenues, real social benefits etc.

But Treasury is right of course - all companies and businesses must stand on their own two feet - unless they are finance companies, of course.

[Balance]

To Clarify...not using "no-hoper" in the colloquial sense as useless good for nothing but in the strict sense as being there being no hope for prospects of success. FPA did what they could for as long as they could as well as they could....kudos to them. But eventually circumstances and the global financial realities caught up with them

Yawn.

Just as financial realities caught up with farmers during the 1980s. And NZ is still farming!

[BIRMANBOY]

Savvy...yes...unworkable yes. Not that this has anything to do with the FPA thread but come on what a waste of brain function and time. Beloved subjects of talkback radio and guaranteed to get the average kiwi joker all wound up. You know as well as I that that conversation aint going nowhere. What you/we should be doing is helping channel education/training into the future not trying to rebuild the past "good ole days"
I have no problem with people waving money.

In fact, I LOVE it!

But I have a real problem with the government throwing money at hopeless cases like social welfare beneficiaries and finance companies.

You savvy?

[elZorro]

To Clarify...not using "no-hoper" in the colloquial sense as useless good for nothing but in the strict sense as being there being no hope for prospects of success. FPA did what they could for as long as they could as well as they could....kudos to them. But eventually circumstances and the global financial realities caught up with them

No hope for prospects of success.. the thoughts of someone who has never taken the plunge into their own business operation. The Fisher and Paykel families did however, take the risks on, and they built up a business worth several hundred million. Along the way, they trained and paid thousands of NZers.

Yes, the rules have changed over the years, we are no longer trying to make all the consumer product needs for NZ, we import most of them. FPA were careful to stay at the leading edge of appliance design in the last few years. But every business has the capability of morphing into something else. What stops this process is a lack of enough R&D investment by the average business owners in NZ.

They have learnt how to run a business, how to take on staff and to keep them employed, and they have figured out what profit margins are required to stay trading. This knowledge takes several years to accumulate, along with the setup of sales channels. A parallel process that would be a good idea for many, is to move the business into more niche and profitable areas, with an eye to exports.

If that process was to be encouraged by the levers of govt, over the several hundred thousand small businesses that are the massive backbone and employers in the economy, then you'd see great results. The payback in terms of taxes generated would soon quell your fears of supporting 'no-hoper' manufacturers. It'd be a win-win.

[BIRMANBOY]

It reached its limit..time to let go. Nostalgia and admiration for the past will buy you nothing, gain you nothing (other than a few warm fuzzies) and only muddy the forward thinking that is required. What is a great idea and is bankable can change overnight and blathering on about more RD wont help it. Start something new or morph it into something else by all means but please dont try and reinvent the wheel. Three dimensional thinking and forward vision is what is needed not Govt. handouts to support anachronistic enterprises. SOmeone needs to be able to sort out what or which is worthy of support.....I'm not so sure I'd put my vote in you EZ...as much as you are a swashbuckling rescuer of young damsels. (see you are living in the past..your avatar proves it:)
No hope for prospects of success.. the thoughts of someone who has never taken the plunge into their own business operation. The Fisher and Paykel families did however, take the risks on, and they built up a business worth several hundred million. Along the way, they trained and paid thousands of NZers.

Yes, the rules have changed over the years, we are no longer trying to make all the consumer product needs for NZ, we import most of them. FPA were careful to stay at the leading edge of appliance design in the last few years. But every business has the capability of morphing into something else. What stops this process is a lack of enough R&D investment by the average business owners in NZ.

They have learnt how to run a business, how to take on staff and to keep them employed, and they have figured out what profit margins are required to stay trading. This knowledge takes several years to accumulate, along with the setup of sales channels. A parallel process that would be a good idea for many, is to move the business into more niche and profitable areas, with an eye to exports.

If that process was to be encouraged by the levers of govt, over the several hundred thousand small businesses that are the massive backbone and employers in the economy, then you'd see great results. The payback in terms of taxes generated would soon quell your fears of supporting 'no-hoper' manufacturers. It'd be a win-win.

[elZorro]

It reached its limit..time to let go. Nostalgia and admiration for the past will buy you nothing, gain you nothing (other than a few warm fuzzies) and only muddy the forward thinking that is required. What is a great idea and is bankable can change overnight and blathering on about more RD wont help it. Start something new or morph it into something else by all means but please dont try and reinvent the wheel. Three dimensional thinking and forward vision is what is needed not Govt. handouts to support anachronistic enterprises. SOmeone needs to be able to sort out what or which is worthy of support.....I'm not so sure I'd put my vote in you EZ...as much as you are a swashbuckling rescuer of young damsels. (see you are living in the past..your avatar proves it:)

Maybe we've exhausted your pub-talk efforts BB. If you look a bit harder at business enterprise you'll see that the answers to a stronger economy are there, and the former and existing govt mechanisms for choosing which firms receive small incentives, are robust. The problem is the current govt doesn't understand or trust small business, and neither do you, by the look of it.

From Stats NZ

At February 2011, the total number of enterprises in New Zealand was 470,050, a decrease of 2,890 (0.6 percent) from 2010. This follows a larger decrease of 1.5 percent between 2009 and 2010. During the eight-year period between 2002 and 2009, the number of enterprises saw an increase every year.

[BIRMANBOY]

I'm afraid you are getting your arguements mixed up here EZ. The thread was based on FPA which hardly qualifies as "small business". However, I realize you are running on empty so to speak so I can understand your confusion. Your quote from Stats NZ means nothing unless you ask all the other questions such as what size were they, what was the $ output, how many employed etc. etc. Statistics can be interpreted in many ways and I guess you are trying to make the point that this decrease is "bad". Maybe its just a sign of the times and shakey unprofitable business just naturally goes away, which it should. Saying the Govt is at fault is just a childish need to blame someone..regardless of the facts. However, you will believe what you want to believe which is fine. I have no problem with dissenting opinion even if it is wrong.
Maybe we've exhausted your pub-talk efforts BB. If you look a bit harder at business enterprise you'll see that the answers to a stronger economy are there, and the former and existing govt mechanisms for choosing which firms receive small incentives, are robust. The problem is the current govt doesn't understand or trust small business, and neither do you, by the look of it.

From Stats NZ

[elZorro]

I'm afraid you are getting your arguements mixed up here EZ. The thread was based on FPA which hardly qualifies as "small business". However, I realize you are running on empty so to speak so I can understand your confusion. Your quote from Stats NZ means nothing unless you ask all the other questions such as what size were they, what was the $ output, how many employed etc. etc. Statistics can be interpreted in many ways and I guess you are trying to make the point that this decrease is "bad". Maybe its just a sign of the times and shakey unprofitable business just naturally goes away, which it should. Saying the Govt is at fault is just a childish need to blame someone..regardless of the facts. However, you will believe what you want to believe which is fine. I have no problem with dissenting opinion even if it is wrong.

I'm sorry the stats don't line up with your version of events BB. If you go back to the stats website, you'll have to admit that not only was the employed rate higher a few years ago, but more tax was being paid, to correlate strongly with the number of enterprises rising.

It's you, and the current govt you no doubt voted for, who are running on empty.

[BIRMANBOY]

Open your eyes man.. the entire world is in a similar position. What do you expect the Govt to do. Oh I know, lets just throw money at it regardless of the chances of success and everything will be fine. Selective and narrow minded comes to mind in your interpretation of the figures.
I'm sorry the stats don't line up with your version of events BB. If you go back to the stats website, you'll have to admit that not only was the employed rate higher a few years ago, but more tax was being paid, to correlate strongly with the number of enterprises rising.

It's you, and the current govt you no doubt voted for, who are running on empty.

[elZorro]

Open your eyes man.. the entire world is in a similar position. What do you expect the Govt to do. Oh I know, lets just throw money at it regardless of the chances of success and everything will be fine. Selective and narrow minded comes to mind in your interpretation of the figures.

http://www.scoop.co.nz/stories/PA1204/S00155/national-let-business-down-on-rd.htm

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10828408


Mr Joyce said the benefit of those programmes was they resulted in new R&D expenditure rather than encouraging businesses to reclassify existing spending as new money.
That is the charge the National Government levels at Labour's R&D tax credit scheme which it canned after winning the 2008 election.


So according to National, no small business in NZ is doing any R&D at the moment, or, they don't trust them to report the correct amount. R&D tax credits were subject to audit.

[BIRMANBOY]

Cant you formulate your own opinions...instead of regugitating media bites? The first is laughable...put out by the labour party...come on.. You know thats impartial ....yeh right. And the second seems reasonable. Govt wants business to increase R and D and are going to chip in as well. Pity they had the ChCh earthquake to allow for in the budget..might have been more otherwise.
http://www.scoop.co.nz/stories/PA1204/S00155/national-let-business-down-on-rd.htm

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10828408

[Xerof]

Just for some light relief, I might ask a question about the terms of the FPA takeover, if I may be so rude to venture back to the topic of this thread.

you guys could take your debate to the off-market discussion threads.....


anyway.....



Does anyone know how long will the compulsory acquisition take to complete, and when will FPA delist?

[elZorro]

Xerof: FPA will leave the NZX on November 12 and be replaced in the stockmarket's top 50 by Steel & Tube on November 13.

For the record, the above argument occasionally referred back to FPA, and I think it was an important topic. :)

[macduffy]

Nice post, Xerof, and very timely!

:bored:

Don't know the answer to your question but I don't think Haier have announced their intention to compulsorily acquire, yet. Unless I've missed something amongst all those posts?

[BIRMANBOY]

OK ok let he who has never wandered off the (well) beaten track make appropriate tsk tsk's. You were all asleep anyway.

[bryndlefly]

money in the bank this morning... burning a hole in my pocket already... :)

[Jim]

money in the bank this morning... burning a hole in my pocket already... :)

So am I, checked my bank account this morning