Fletcher Building yesterday warned shareholders to treat with caution an offer for their shares by Fairfield Securities, a company associated with businessman Bernard Whimp.
While the offer of $11.50 per share was above the current market price of Fletcher Building shares, investor and media relations manager Philip King warned shareholders to consider the conditions.
Fairfield would be able to sell the shares acquired immediately even though shareholders would not be paid in full for 10 years.
Fairfield was offering no security for future pay-ments and payment for the shares was deferred so that the total amount would not be received until the end of the 10-year period.
Shareholders would not receive dividends on the shares they sold over the next 10 years if they accepted the Fairfield offer, he said.
"In view of these concerns, Fletcher Building recommends shareholders take no action in respect of the offer by Fairfield Securities," Mr King said.
Fletcher is the latest of companies, directors and shareholder representatives issuing strong warnings against accepting low-ball offers from companies associated with Mr Whimp.
Mr Whimp caused outrage in the investment community earlier this year when he sent letters to shareholders in several companies offering to buy shares at below-market prices.
The letters did not make a comparison to market.
The Government is moving to make this a requirement.
This time Mr Whimp is offering a price above market but it is payable over 10 years and dividends are foregone.
Directors say the offers are low-ball and predatory, targeting unsophisticated investors.
The Securities Commission urged shareholders to get advice and affected companies went public with their concerns.
The New Zealand Shareholders Association also issued a warning this week and Vector joined the list of companies affected.
NZSA chairman John Hawkins said the offer effectively asked people to make an interest-free loan for 10 years to someone they did not know.
Mr Whimp had been banned as a company director in the past.
"Ask yourself if you would trust this man," he said.
Mr Hawkins said sharebroking firms were willing to advise people generally about the problems with the offers free of charge.
No-one should rush to accept the offer before obtaining advice.
Shares were always able to be sold on the stock exchange with full payment guaranteed in three days.
"Why would you want to wait 10 years?" he said.
People receiving the offers should post the reply-paid envelopes back leaving them empty.
Vector chairman Michael Stiassny said he was appalled Mr Whimp was engaging in actions that would result in a significant financial loss to shareholders if they accepted the offer.
NZ Investment Securities LP, a company associated with Mr Whimp, had made an offer to Vector shareholders at $3.20 per share, above the market price.
"This is blatant trickery and is targeting investors who may not read the 10-year payment period in the fine print or understand that they would be handing their dividends over to NZ Investment Securities LP," Mr Stiassny said.
On Wednesday, DNZ Property disclosed that its shareholders were being targeted and said the offer might be ineffective as parts of the documents have an incorrect company name.
Abano Healthcare said it has received a request to provide a copy of its share register to Mr Whimp.
