Shareholders warned against low-ball offers

Monday 28th March 2011

Air New Zealand, Port of Tauranga and Auckland International Airport look set to be the target of low ball offers from companies associated with businessman Bernard Whimp and today warned their shareholders to seek advice.

The three companies said in a joint statement that they received requests for their shareholder lists last week. While they had legal obligations to provide the lists, they were committed to safeguarding their investors' interests, and would take any measures available to do this.

Limited partnerships associated with Whimp have made unsolicited offers in letters to shareholders of Contact Energy, DNZ Property, Guinness Peat Group, TrustPower, Vector and Fletcher Building. Before making the offers they sought shareholder lists.

The offers have been condemned by boards and shareholder groups as trickery as they offer more than the market price, but the amount is payable over 10 years and dividends are forgone, making their value below current market value. Whimp's position is that the offers are not misleading.

The Law Society has urged shareholders to bin the offers.

The High Court this week granted interim injunctions to stop shares being transferred to limited partnerships associated with Whimp. A hearing will take pace on May 9 when the court will determine whether the offers are misleading.

The injunctions were sought by the Securities Commission, which has also ordered corrections of the offers. The interim injunctions also prohibit any substantially similar offers being made and require the partnerships and Whimp to provide the commission with information about these offers, and other unsolicited offers made in December.

The Government is moving to require such offers to have a comparison with the market price.

The offers are said to target unsophisticated investors who accept them even though they could get more for their shares by selling them on the sharemarket.

NZPA

Comments from our readers

No comments yet