Sky City Entertainment shareholders could lose about $1 a share if they took up an unsolicited offer made yesterday by interests associated with Bernard Whimp.
The Securities Commission issued a warning to Sky City Entertainment shareholders that NZ Investment Securities (NZIS) was making an unsolicited offer for their shares.
NZIS offered to buy Sky City shares for $2.30 a share when they were trading yesterday at $3.39 a share. The general partner of NZIS was Mr Whimp.
The commission was taking legal proceedings against NZIS and other partnerships associated with Mr Whimp.
"The commission considers that it cannot be in a shareholder's interests to accept the offer," the commission said in a statement.
The amount offered per share was less than the 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 meant that any shareholder who accepted the NZIS offer would lose around $1 a share, or about a third of the value of the share.
In addition, payment for the shares would not be made until up to 14 days after NZIS had received notification from the share registry that the shares had been transferred. It was likely that shareholders would not receive payment for shares sold under the offer for at least three weeks.
The commission said it was 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 was against the law to mislead or deceive investors into accepting an offer.
The offer suggested there was an urgent need for investors to act on the offers. The commission was not aware of any circumstances that would render that suggestion true.
