SecCom warning on latest Whimp low-ball offer

The Securities Commission has warned Sky City shareholders about an offer from Bernard Whimp’s NZ Investment Securities LP (NZIS) to buy their shares for $2.30 per share.

The commission is currently taking legal proceedings against NZIS and other limited partnerships associated with Mr Whimp.

The commission “considers that it cannot be in a shareholder’s interests to accept the offer” for a number of reasons.

Firstly, the amount offered per share is less than the current market price of the shares: at 11.00am today, the market price was $3.39 per share (NZX:SKC).

That means that any shareholder who sold their shares to NZIS today would lose around $1 per share - or around a third of their shares’ value.

In addition, payment for the shares will not be made until up to 14 days after NZIS has received notification from the share registry that the shares have been transferred.

“It is therefore likely that shareholders will not receive payment for shares sold under the offer for at least three weeks after they accept it,” the commission said.

“If the shares were instead sold through a broker, a shareholder would likely be entitled to receive payment within three working days.

“The offers suggest that there is an urgent need for investors to act on the offers. The commission is not aware of any circumstances that would render this suggestion true.”

It is not illegal to make an unsolicited offer to buy investments or to offer to buy them at a price below their current market value.

However it is against the law to mislead or deceive investors into accepting an offer.

The commission is aware that Mr Whimp, and some other people, have recently requested the share registers of a number of other listed companies and is concerned that a other unsolicited offers may be made in the coming weeks.

Any investor who receives an unsolicited offer is encouraged to treat such an offer with great caution - to carefully read the offer in full including any fine print anywhere on the forms, and to take the time to make a few important checks.