DNZ raises extra $10m from share sales

The Meridian Energy building in Wellington is part of DNZ's property portfolio. Photo / Supplied

DNZ Property's board said yesterday it had raised $45 million, $10 million above the minimum it was seeking in a capital raising.

Shares not taken up by existing shareholders were offered through a bookbuild process and that was well supported by new investors, the board said.

"As a result of the demand and pricing outcome achieved, the board exercised its discretion to accept an additional $10 million of applications," it said.

The company lists on the sharemarket next Monday. It previously traded on the Unlisted market.

It said yesterday that existing shareholders bought only $8.25 million worth of shares, and this included some excess subscriptions allowed under the offer. The company has 8000-plus existing shareholders.

Meanwhile, a low-ball bidder of DNZ shares - Bernard Whimp of Christchurch - drew a Securities Commission warning, the second caution he has attracted this month.

Last Monday, DNZ wrote to its investors advising against accepting his Carrington Securities LP 60c offer for their shares.

Yesterday, the commission said that because DNZ shares were not trading on any market - they were trading on Unlisted and will soon trade on NZX - it was impossible to ascertain the true value.

Earlier this year, the Business Herald reported Whimp was behind Marchmont Securities' low-ball offer for Strategic Finance debentures.

The Companies Office lists Whimp as a banned director, a four-year term which ends in October. A year ago he applied to the Supreme Court for leave to appeal against his conviction for burglary and removing documents of a company in liquidation and failing to deliver them up.

Carrington lists its offices as Level 20, ASB Bank Centre, 135 Albert St but asked for share offer acceptances to be sent to a PO Box in Wellesley St.

Yesterday, the commission explained its Carrington caution.

"The Securities Commission reminds investors to be cautious of any unsolicited offer to purchase their investments and urges investors to seek professional advice before making any decision to accept the offer.

"As the shares are not currently trading on any organised market, there is no market price against which investors can assess the offer and accordingly, it is very difficult to accurately assess the value of the company's debentures. Shareholders should consider, together with other relevant factors, the indicative price range of 80c to $1.05 per share which is set out in DNZ's prospectus.

"Under securities legislation it is not illegal to offer to buy securities below their face value. Any offer to buy securities from investors must not be misleading or deceptive," the commission said.

Last week, DNZ said it had found out that Carrington was sending unsolicited letters to shareholders making the offer which it said was substantially below the last traded price of the shares on the Unlisted market of 90 cents and also substantially below the indicative price range of 80 cents to $1.05 as detailed in the DNZ's offer document of July 9.

"The board is concerned that the letter from Carrington may be confusing to some investors. However, under securities legislation it is not illegal to offer to buy shares below their market value.

"Shareholders should note that Carrington is a limited partnership that was formed in July 2010 by Bernard Terence Whimp of 138 Park Tce, Christchurch. Bernard Terence Whimp was banned as a company director for four years in 2006. The board recommends that shareholders be wary of this offer and should seek professional advice before making any decision," DNZ said.

- Additional reporting: NZPA

BERNARD WHIMP
* Four-year ban as company director.
* Disqualified: October 30, 2006.
* End date: October 30, 2010.
* Operating a registered limited partnership, Carrington Securities LP.

Source: NZ Companies Office