‘Predatory’ transfer offer defended
Christchurch businessman Bernard Whimp says an initial $7000 investment in mailing out ‘‘low ball’’ share offers in 2011 eventually gave him a profit over several transactions of $3.6 million.
He was in the news this week for abandoning High Court proceedings against energy company Vector, which refused to transfer investors’ shares for what it called a ‘‘predatory’’ offer to 300 shareholders. Whimp said the legal arguments were about technicalities of share transfers and it was a commercial decision to abandon the lawsuit.
‘‘We might have won but we’re not in the business of running actions we might win.’’ Whimp said his initial $7000 investment in 2011 paid for the mailout costs of his first offer, which he sold at sufficient profit to launch several more.
Share buyers were not required to front up with the money immediately, allowing time to sell them at a profit.
Whimp has made offers to shareholders of at least seven listed companies including Vector, Contact Energy, Telecom, Fisher & Paykel, TrustPower, Guinness Peat Group and Fletcher Building – at prices that were about 30 per cent below listed prices.
He also made offers for debt securities in South Canterbury Finance and Strategic Finance, which collapsed soon afterwards.
Whimp said the South Canterbury Finance debt security investors subsequently lost all their money, and Strategic Finance investors received 20 cents in the dollar over five years.
‘‘That shows my offer of 10c in the dollar for Strategic was about right.
‘‘Directors and financial advisers were calling me a predator.
‘‘But it was simply that my offers upset the carefully crafted messages of directors trying to control distressed assets.
‘‘If it was someone buying or selling a car, why should they regard the market price as market value?
‘‘A lot of stock exchange-listed shares might only be worth half the listed price, and there are quite a lot of Vector shareholders who would have received their shares only as a result of being customers,’’ Whimp said.
‘‘They may not have bought them on-market, and a lot of them won’t have accounts with sharebrokers, which can be a hassle to set up, and there’s a fee.
‘‘So when they received an offer from me all they had to do was sign them over.
‘‘I’ve had feedback from lots of people saying they wished they’d thought of it.’’
Whimp said that in coming weeks he would launch an investment vehicle with similar offers.
He was raised in Christchurch and is now based in Rangiora.
His brother Simon Henry is a wealthy property investor who changed his surname many years ago, while another brother is also a successful businessman.
After Whimp’s low ball offers in 2011, the government introduced the Securities Markets (Unsolicited Offers) Regulations 2012. The new regulations made it far more complicated to make offers, including having to provide more information about current market prices.