Court cancels Whimp's 'low-ball' share offers

The High Court has cancelled acceptances of 'low-ball' payment offers made for some listed companies by Bernard Whimp and has banned him from making any such future offers.

With the exception of a small number, any agreements made to sell shares to Mr Whimp and associated entities are cancelled and any shares that have already been transferred are to be returned, the court said.

Almost 1200 investors, with a combined $7.2 million of of shares in six listed firms, accepted his deferred payment offers. The offer contact appeared to be at a premium to the market price but fine print revealed that the investors would be paid in instalments over time, thereby undervaluing the shares.

The court order excludes deals with a small number of shareholders who responded to a communication from Mr Whimp confirming they wished to continue with the sale of their shares.

The ruling follows action initiated by the Securities Commission - taken over by the Financial Markets Authority FMA.

FMA chief executive Sean Hughes welcomed the decision, saying it means "investors should no longer be deceived by these kinds of offers. This will not only help to restore investor confidence in our financial markets, but also send a clear message about inappropriate conduct which otherwise damages the market’s reputation. Companies and shareholders should be happy with this outcome."

The court orders relate to the offers, all dated on or around 15 - 18 March 2011 made by the following entities associated with Mr Whimp:
· Carrington Securities LP - offer to buy shares in TrustPower Limited
· NZ Investment Securities LP - offer to buy shares in Vector Limited
· Chase Securities LP - offer to buy shares in Guinness Peat Group plc
· Carlyle Securities LP - offer to buy shares in Contact Energy Limited
· Energy Securities LP - offer to buy shares in DNZ Property Fund Limited
· Fairfield Securities LP - offer to buy shares in Fletcher Building Limited

The judgment does not extend to sales of shares to Mr Whimp as a result of the ‘low ball’ offers he made in December 2010.