The Securities Commission has moved to make businessman Bernard Whimp correct unsolicited offers for shares in a number of listed companies which have triggered outrage in the investment community.
The Securities Commission has moved to make businessman Bernard Whimp correct unsolicited offers for shares in a number of listed companies which have triggered outrage in the investment community.
Company directors, shareholder representatives and regulators have urged investors to get advice when considering offers from limited partnerships associated with Mr Whimp. The offers are above the market price but they are payable over 10 years and dividends are foregone, making them below market.
The Securities Commission today made orders against limited partnerships associated with Mr Whimp, requiring them to send corrective statements to the shareholders they had written to, pointing out the offers were misleading.
The corrective statement directs shareholders to the fine print of the offer and says the net present value of the offer is less than the nominal market price.
"This means that the offer is not only worth less than may appear at first sight but is worth less than the amount of money you would get if you sold the shares now through a sharebroker at their current trading price," the statement says.
The companies affected at TrustPower, Vector, Guinness Peat Group, Contact Energy, DNZ Property and Fletcher Building.
This is the second time Mr Whimp has targeted listed New Zealand companies with low-ball offers and the Government is moving to force such offers to have a comparison to market stated in them.
New Zealand Shareholders' Association chairman John Hawkins has said that the offers effectively asked people to make an interest-free loan to someone they don't know for 10 years.
Vector chairman Michael Stiassny has called the offers "blatant trickery".
The commission is also considering taking further action arising from the misleading offers.
Although it is not illegal to make an unsolicited offer to buy someone's investments, and even to offer to buy them at a price below their current market value, it is against the law to mislead or deceive investors into accepting an offer.
