Whimp offers SkyCity investors $1.12 less than current market price

Bernard Whimp. Photo / Supplied

Bernard Whimp, the man responsible for several so-called "low-ball" offers for shares in leading listed companies, has again come to the attention of the Securities Commission, this time over an offer for shares in casino operator, SkyCity Entertainment.

The commission said SkyCity investors should be aware of an offer dated April 18 from NZ Investment Securities LP (NZIS) to buy their shares for $2.30 a share - a $1.12-a-share or 32.75 per cent discount to yesterday's closing level of $3.42. Whimp is the general partner of NZIS.

The commission said it could not be in shareholders' interests to accept the offer for SkyCity because it was substantially lower than the current market price of the shares.

"If a shareholder instead sold their shares through a broker, they would receive the full market price (less any fees payable). 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," the commission said.

"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 probably be entitled to receive payment within three working days. The offers suggested that there was an urgent need for investors to act on the offers, the commission said.

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 said it was also aware that Whimp, and some other people, had requested the share registers of a number of other listed companies and was concerned that other unsolicited offers might 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," the commission said.

The High Court at Wellington last month granted the commission injunctions to stop shares being transferred to limited partnerships associated with Whimp on the grounds that they were misleading.

Offers for shares in Contact Energy, DNZ Property, Guinness Peat Group, TrustPower and Vector have been condemned by boards and shareholder groups as trickery.

Whimp's position was that the offers were not misleading.