Business

Firms spending big to fight off Whimp offers

10:15 am on 28 April 2011

The Shareholders' Association says some businesses are spending tens of thousands of dollars to discourage their investors from selling their stocks at well below market value.

In the past week, the Warehouse and Sky City Entertainment have sent letters to all their shareholders warning them about the notorious stock buyer Bernard Whimp.

Mr Whimp has recently contacted some investors and offered to buy their stocks - for about a third less than the market price.

He caused widespread upset late last year when he launched similar share raids on firms like Vector, Telecom and Fletcher Building.

Shareholders' Association chairman John Hawkins says Mr Whimp is a vulture who preys on those who aren't financially literate.

He says it is costing businesses a huge amount of time and money to contact and warn all their investors.

The Securities Commission says it is concerned more unsolicited offers may be made in the coming weeks and is urging shareholders to be very wary of them.

The markets supervision arm of the NZX is also urging investors to be cautious, and to compare the offer price with the current share price.

Financial adviser Murray Weatherston says it's not illegal to offer to buy someone's shares but it is illegal to engage in deceptive or misleading conduct.