Markets watchdog hopes for more bite

Last updated 05:00 21/09/2012

Relevant offers

Industries

Big Oil eyes public pressure as banned crude export solution Alex Swney pleads guilty to defrauding Heart of the City Rio Tinto reveals surprise 12pc export drop The dangers of deep sea oil drilling: NZ’s shocking safety record revealed Chinese banking giant breaches Reserve Bank rules BMW cuts production in China Dirt, arsenic and lead polluting air in industrial Christchurch High returns unsustainable after solid March quarter Tower strengthens its Canterbury rebuild reinsurance cover RB rate seen on hold with annual inflation just 0.1 per cent

The Financial Markets Authority says it cannot do any more to stop low-ball share offers under current rules, but moves are under way that could give it more bite.

The watchdog is responding to criticism from Vector chairman Michael Stiassny, whose company became the latest target of low ball bidder Stock & Share Trading.

The Australian firm has recently been contacting Vector shareholders and offering to buy their shares at $1 apiece, which is about a 65 per cent discount on the trading price at the time of $2.85.

Stiassny said this was the second time Vector had been targeted by low-ball bidders.

“It can't be in any of our interests or the interest of New Zealand Inc to see any shareholder burnt and that's what we have got to focus on,” said Stiassny, particularly as the government looked to tap mum-and-dad investors to get the partial float of the state-owned energy assets over the line.

His comments come after the FMA tightened rules on unsolicited offers in May last year, requiring bidders to carry a warning statement that lists the market value of the security and to recommend they contact an authorised financial adviser before undertaking any sale.

The FMA has published a brochure on unsolicited offers and sent out several warnings to the public cautioning them of the risks involved.

Although it is hard to judge how the warnings have affect investor take-up, they have done little to stem the volume of offers, with firms such as Fletcher Building.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content