A letter offering beer money for champagne shares has been condemned as "nothing more than a scam".
That is the opinion of one Wanganui investor who received an offer of $4.07 for his Contact Energy shares, currently trading on the New Zealand Stock Exchange for $6.10.
The offer came from Energy Services,
an organisation apparently being headed by Bernard Whimp, who has a reputation for directly approaching shareholders and offering "low-ball" prices for high quality stocks. The practice is not illegal.
The man, who declined to be named, said the letter, which arrived yesterday morning, offering to buy his Contact Energy shares for 30 per cent less than they were worth, included paragraphs indicating there was need for urgency in making the decision to sell and set January 7 as the deadline for acceptance of the offer.
He said the letter also suggested that he could seek advice from a stockbroker or financial adviser. But with those agencies closed for the festive season it would be almost impossible to get any advice.
The man said the offer was opportunist in coming at a time when some people might be strapped for cash and might make a spur-of-the-moment decision to sell ... and lose out badly.
"I would hate to think that anyone would be taken in by this," he said.
His response was to use the reply-paid envelope that came with the letter to offer to buy the writer's house for 30 per cent less than its market value. He was also concerned that the people making the bid for his shares knew exactly how many he owns and had his contact details. The New Zealand Stock Exchange has referred those being approached to sell their shares cheaply to check out the warning previously issued by the Securities Commission. The warning says that while such offers are not illegal it is against the law to mislead or deceive investors into accepting an offer. Shareholders should always take the time to compare the offered price with the share market price.
