DNZ chairman Tim Storey has hit out at Bernard Whimp after he targeted DNZ investors with another unsolicited “low-ball” offer to buy their shares through his limited partnership Energy Securities.
Last August he successfully bought 2.2 million DNZ Property Fund shares at 60c shares of DNZ Property Fund. Those shares most recently traded at $1.22.
The share price being offered by Mr Whimp is $1.65, however, if accepted this will not be paid in one lump sum at the time of purchase.
Instead, shareholders will be paid in equal instalments over a 10-year period. Also, all future dividends are foregone by the selling shareholder during that 10 year period.
And DNZ has warned shareholders that over the 10 year period, there can be no certainty that the instalments will in fact be paid.
Mr Storey said, “The 10 year payment period means that the actual real value being received by shareholders who accept the offer is significantly less than the face value of the Whimp-associated offer and also to the current market price for DNZ shares.
“I strongly recommend that the DNZ shareholders who have been approached seek independent financial advice prior to responding to this offer from Energy Securities LP.
Mr Storey said he was “astounded” that DNZ shareholders are again being targeted by Mr Whimp.
“The headline offer price is clearly preying on less sophisticated investors who may not see the 10 year payment period in the fine print of the offer, or understand its affect on the actual price of the offer.
"While this offer is predatory, and we believe misleading to shareholders, it does seem the offer is most likely ineffective as it incorrectly states the name of the company.”
DNZ has referred the matter to the Securities Commission and is seeking legal advice as to the implications of the offer.
Parliament is looking at a law change to target low-ball share offers from the likes of Mr Whimp.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Commerce Commission reveals the most complained-about companies
- Editor's Insight: How the candidates fared in the first presidential debate
- Blow by blow: Clinton, Trump fail knockout in first presidential debate
- FMA witnesses ‘enthusiastic amateurs’: Warminger defence
- MARKET CLOSE: NZ shares drop, Orion Health and Xero lead index lower while Air NZ bounces
Most listened to
- No knockout blows in first presidential debate, says NBR's Nevil Gibson
- Intueri's problems raise questions for the board, says Martin Watson of the Shareholders Association
- ANZ's Philip Borkin and NBR's Jason Walls on what's next for the kiwi dollar on Currency Talk
- AngelEquity's Bill Murphy on why his platform won't cater for retail investors
- Spark exec Jason Paris defends his company's honour after it tops ComCom's most-complained-about list
- FMA lawyer Justin Smith counters the Goldman Sachs defence