The Whimp-lash continues

Thursday 17th March 2011

Businessman Bernard Whimp is back in the New Zealand market with low-ball offers for company shares, triggering warnings from the companies concerned and the market regulator.

The businessman has been accused of preying on unsophisticated investors with unsolicited offers in letters which do not contain a comparison with the market price. The Government has signalled a move to require a market comparison to make low-ball offers more apparent to investors.

Today there was a further twist as Whimp's Energy Securities LP is offering $1.65 a share for DNZ Property shares, which is above the $1.22 market price. But the amount is paid in instalments over a 10 years and future dividends are foregone.

DNZ chairman Tim Storey said he was astounded that DNZ shareholders were again being targeted by Whimp but the latest offer may be ineffective as in parts of the documents have an incorrect company name.

Vector previously gave its shareholders a "second chance" to reconsider an offer from Whimp by stopping the share transfers because share transfer certificates were not correctly filled out.

"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," Storey said.

"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.

The 10 year payment period meant that the actual real value would be significantly less than the face value of the Whimp-associated offer and also to the current market price for DNZ shares, Storey said.

Abano Healthcare said it has received a request to provide a copy of its share register to Whimp.

"We understand we are one of several companies to have been approached by Mr Whimp. These requests may be a preliminary step by him or associated interests to making a low ball offer to Abano shareholders and we have therefore informed the Securities Commission," chairwoman Alison Paterson said.

The commission said it was aware of a number of unsolicited offers from Whimp, including for TrustPower shares and DNZ Property.

The offers were at prices that appear at first sight to be above their market value. However, the offers were worth significantly less than may appear at first sight.

The commission has also been informed that requests have been made by Whimp for copies of the share registers of a significant number of New Zealand listed companies and suspects that a large number of investors may soon receive unexpected offers for their investments.

Commission chairwoman Jane Diplock said investors should seek advice.

While it was not illegal to make an unsolicited offer to buy investments, it was against the law to mislead or deceive investors into accepting an offer, and the commission was urgently reviewing the current offers in light of that requirement.

Whimp was banned from being a company director for five years in September 2007.

DNZ Property said last time Whimp made an offer its shareholders sold $2.2 million worth of shares.

NZPA

Comments from our readers

No comments yet