A predatory offer to buy shares in New Zealand's top listed companies for much less than they are worth has generated rather more criticism than it deserves.
The move, while perhaps distasteful in the way it targets mum-and-dad investors in the immediate aftermath of their Christmas spend-ups, is clearly not
illegal. Nor is it particularly out of the ordinary. Is the promoter of the offer really all that much different from the person who makes a cheeky bid on a house?
In most such instances, including this one, the vast majority of people will toss the bid straight in the rubbish bin. But in any market there are people who, because of their circumstances, appreciate the opportunity to dispose of something quickly and conveniently and are willing to accept a lower price as the trade-off. Doubtless, some investors will accept this offer for that very reason.
Some critics have complained that the market price of the shares is not included in the offer. But people surely have a responsibility to be familiar with the value of their investments. Protection of shareholders can only go so far. It should not involve over-the-top regulation that effectively wraps them in cotton wool.
A Ministry of Economic Development paper, released last June, got it right. It was not convinced by steps taken by Britain and Australia to, among other things, restrict access to share registers. This invites unintended consequences for an issue that should be within the wit of any sharemarket investor to manage.
