Rules aim at low-ball offers
New rules aimed at thwarting low-ball share offers come into force next week, just as another significant NZX company is being targeted.
Shareholders in Lower Hutt metals distributor Steel & Tube - including many of the company's 800 staff - received letters from Stock & Share Trading offering to buy their shares for $1.30 each.
Shares in Steel & Tube were yesterday trading at $2.26 a share, making the Stock & Share offer a discount of 42.5 per cent to the prevailing market price.
Chairman Sir John Anderson wrote to shareholders last week, warning them to take financial advice and note the market price of the shares before they considered accepting the offer.
Such warnings have become a regular occurrence since 2010, when Bernard Whimp began a campaign of low-ball offers to shareholders in bluechip New Zealand companies.
The Financial Markets Authority (FMA) has since tightened the rules around the offers - and Whimp has "retired" from the business - but Stock & Share, an Australian group, has continued to make offers within the new rules.
The new regulations that come into place from Saturday further tighten the rules.
The FMA said a key change was that shareholders who accepted the offers would have a 10-day cooling-off period during which they could change their minds.