Investors urged to spurn unsolicited offers

Investors in six leading companies are being urged to bin unsolicited and opportunistic offers for their shares at prices wildly below their levels on the NZX.

The offers are for shares in Vector, Fletcher Building, Telecom, Nuplex, Guinness Peat Group, and Contact Energy.

Energy Securities LP sent out a letter offering $1.56 per share for Vector shares -- which is 80 cents less per share than Vector was trading at on the NZX today.

One of the people behind Energy Securities' offer is businessman Bernard Whimp, whose address is registered with the companies office as 93 Liverpool St, Sydney.

Mr Whimp was banned from being a company director for four years from October 30, 2006 in New Zealand. ONE News reported that in 1997 a company dug up a carpark they had completed for Mr Whimp when he didn't pay for the job. He previously made a cut price offer for DNZ Property Fund Ltd shares.

NZPA has also seen a document from NZ Investment Securities LP offering $4.07 for Contact Energy shares when they are trading at $6.21 today. While a document from Carlyle Securities is offering $1.43 for Telecom shares when they were trading at $2.18 today.

The documents have language that creates a sense of urgency and are being sent at a time of the year when investors may be strapped for cash and may have difficulty reaching financial advisers. Investors are helpfully provided with an amount due to them from the offers but there are no comparisons with the current market price.

Fletcher Building said the offer for its shares is from Cargill Securities LP at $5.64 a share, which is well below the $7.73 the stock was trading at this afternoon.

"The offer by Cargill Securities has not been endorsed by Fletcher Building and appears to be an opportunistic bid to acquire shares cheaply," Fletcher Building said.

"It is recommended that shareholders not accept the offer and ignore the documents sent to them by Cargill Securities."

NZX Market Supervision also today urged caution with respect to the offers.

Energy Securities is attempting to snare 5 million Vector shares and if they sold them on market straight away they will stand to make a cool $4 million.

In August, the Securities Commission said it had received a number of complaints from investors about unsolicited offers from different people.

It was not illegal to make an unsolicited offer or even to buy at a price below the current market value, the Securities Commission said at the time, but it was against the law to mislead or deceive investors into accepting an offer.

Shareholders were urged to seek advice and support. They should also ask what the person making the offer had to gain.

The letter from Energy Securities for Vector shares urged shareholders to "Act now" if they wished to accept.

The offer was open until January 7 or until it had received acceptances for 5 million shares.

It was "first come, first served," Energy Securities said.

The letter said that the offer complied with New Zealand law and it advised shareholders to obtain advice before accepting.

Energy Securities said that it made no recommendation or representation as to the fairness or merits of the offer.

Helpfully, the letter added: "The offer price does not, and should not be taken to constitute a representation as to the value of your shares."