Low-ball offer nets 2.2m DNZ shares

DNZ Property chairman Tim Storey. Photo / Brett Phibbs

Carrington Securities has bought more than 2.2 million shares at below market prices from the DNZ Property Fund's smaller shareholders.

Carrington offered to buy at 60c per share, compared to the last traded price on the Unlisted market of 90c and yesterday's closing price of $1.02 on the NZX, where DNZ listed on August 16.

DNZ said its board was referring the matter to the Securities Commission and the NZX.

"These kinds of offers are designed to take advantage of unsophisticated and vulnerable investors. It is of considerable concern that there is nothing that can be done to stop this type of unethical and predatory activity," DNZ Property chairman Tim Storey said.

Carrington is a limited partnership formed in July by Christchurch man Bernard Whimp.

On August 10 the Securities Commission warned DNZ shareholders to be wary of the Carrington offer.

At that time the shares were not trading on an organised market and there was no market price against which investors could assess the offer, although an indicative range of 80c to $1.05 was given in a DNZ prospectus.

The commission acknowledged it was not illegal to offer to buy securities below their face value, but an offer must not be misleading or deceptive.

- NZPA