Whimp-lash from DNZ Property over low-ball offer

Wednesday 16th March 2011 1 Comment

DNZ Property Fund has become the latest target of a "predatory" offer from a company associated with businessman Bernard Whimp.

DNZ said that its shareholders have received an offer from Energy Securities LP, the general partner of which is Whimp. The price being offered is $1.65 a share, which is higher than the $1.22 in trading on the NZX this afternoon. But the amount is paid in instalments over a 10 year period and future dividends are foregone.

"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," DNZ chairman Tim Storey said.

He strongly recommend that DNZ shareholders seek independent financial advice before responding to the Energy Securities LP offer.

Companies associated with Whimp have written to shareholders of many companies on the NZX this year offering to buy shares at below market prices. The letters do not contain a comparison with the market price.

Companies have warned against accepting the low-ball offers and in some cases have tried to "save shareholders from themselves" by stopping share transfers on technicalities.

A parliamentary committee has recommended financial market legislation to stop low-ball share offers.

Storey said he was astounded that DNZ shareholders were again being targeted by 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," he said.

DNZ has referred the matter to the Securities Commission and is seeking legal advice as to the implications of the offer.

NZPA

Comments from our readers

On 17 March 2011 at 6:09 pm Peter said:

Received a letter from Carlyle Securities offering $7.60 for our Contact Energy shares.Well above current price, same thing, payment over 10 years