Dorchester hit by low-ball offer
Dorchester Pacific is the latest company to be targeted by a low-ball share offer from Australian business Washington Securities.
Washington Securities has advised Dorchester Pacific it intends to make unsolicited offers to buy shares in the finance company, at a price significantly below the market value.
It is offering Dorchester shareholders 10 cents a share, more than 60 per cent below the company's share price of 27c.
Washington Securities, which was set up in February and directed by John Williams Armour, has previously targeted Fletcher Building and Vector shareholders.
Low-ball share offers hit the headlines throughout 2010 and 2011 when more than 300 Vector shareholders responded to another unsolicited offer and sold their shares for well below the market value.
Opportunistic bidders typically request a copy of the shareholders roll, identify investors with small parcels of stock and make them a below-market-value offer. The proposed offer by Washington Securities for Dorchester Pacific shares is expected to open on May 28 and close on June 27.
Dorchester Pacific said it viewed the offer as unethical though it was not illegal.
Dorchester strongly recommended shareholders who received a letter from Washington Securities to seek independent financial advice and check the most recent market price, even if they viewed the offer as convenient.
Shareholders should be aware Washington Securities might make an offer to targeted groups of shareholders through a series of offers during the next six months, Dorchester said.
The securities markets regulations give shareholders the right to cancel any acceptance of the offer up to 10 working days after the date of the acceptance.