WARNING - Unsolicited bid for Vector shares

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Forums › Finance and wealth management › WARNING - Unsolicited bid for Vector shares

ockel

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#74409 29-Dec-2010 14:21

Received mail - Energy Securities LP has made me an offer to purchase my Vector shares.

While the Securities Commission has not posted a warning at this stage I find it appropriate to warn all Geekzone members regarding this unsolicited offer.

Traditionally the Securities Commission will caution investors about unsolicited bids and advise them to contact an investment professional before making any decision.

Energy Securities is offering $1.56 per share.

Vector shares have traded most recently the range of $2.30-$2.37 and in the last six months between $2.02 and $2.56.

If you or any of your friends or family receive an offer from this firm you should contact a professional before making a decision.

It is not illegal to offer to buy shares at a price below their face or current value.

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gjm

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#422396 29-Dec-2010 15:12

Funny...I just got a letter from them for some telecom shares I own as well. I guess enough people must take this up to make it worth while for them. As you say, not illegal, but still a bit of a scam.

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#422398 29-Dec-2010 15:14

I don't think it's a scam. They offer to buy, someone wants to sell. As said in the OP, it's not illegal to offer to buy for less than the value.

But... They probably buy low, and sell at market value, or hold until it gets better. My bet is that telecommunication shares will get better, with all the UFB talk...

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#422400 29-Dec-2010 15:16

Someone just pointed this out to me: Shareholders get low-ball offers.

Bernard Whimp, a businessman who offers to buy securities at low-ball prices by making a direct approach to investors, appears to have mounted a new campaign over the Christmas-New Year season to buy leading New Zealand stocks.

Investors say they've received mailed offers to buy their shares from a range of limited partnerships including Energy Services and Fairfield Securities.

It referred those approached to a Securities Commission warning which says while such offers are not illegal it is against the law to mislead or deceive investors into accepting an offer.

Here is the interesting part:

The offers expire on January 7, three days before the Securities Commission is due to re-open after its Christmas break.

Someone trying to do a run before the regulators come back from holiday?

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gjm

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#422403 29-Dec-2010 15:18

I think the scam part of it is that they seek to take advantage of those that do not know the market price for their shares. Sure people should be aware of what they are doing but you are going to get people like my 95 year old grandmother who signs just about anything that comes in the mail and has managed to give quite a few thousand dollars away from those looking to take advantage of others in a manner that I would say is "scamful"

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ockel

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#422404 29-Dec-2010 15:19

gjm: Funny...I just got a letter from them for some telecom shares I own as well. I guess enough people must take this up to make it worth while for them. As you say, not illegal, but still a bit of a scam.

Apparently the last time this person did a similar offer he managed to acquire 2.2 million shares at 60 cents when they were trading at $1.18. Source: NZHerald.

Not a scam from a legal perspective but if you've accepted the offer then the words one would use would be a lot more colourful.

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#422414 29-Dec-2010 16:06

Useful for when you've got odd lots and the brokerage would not make it worth your while to sell.

e.g. if you have 23 shares only

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#422431 29-Dec-2010 18:29

gjm: Funny...I just got a letter from them for some telecom shares I own as well. I guess enough people must take this up to make it worth while for them. As you say, not illegal, but still a bit of a scam.

I received a letter from Carlyle Securities offering to buy my Telecom shares; As MF states above, the offer expires on January 7th.
First thing I did was put it in the bin :D

tomgeeknz

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#422432 29-Dec-2010 18:32

TV3 showing a story on this now. The person doing it is banned from being a company director until October... Dodgy.....

Stu

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#422457 29-Dec-2010 20:03

Wasn't it October 2010?

DeadlyNZ

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#422465 29-Dec-2010 20:31

Well what would you expect from a bottom feeding scumbag???

richms

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#422475 29-Dec-2010 21:18

No different to the people that go to people at the carfair etc and make stupidly low offers.

If you sell something without knowing what it is worth then you are an idiot. Idiots and money deserve to be separated.

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jtbthatsme

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#422483 29-Dec-2010 21:36

This is not what I call a scam and agree with the above comment about a fool and there money are soon parted. Ultimately if you want to sell your shares and you accept a low offer thats really a decision your entitled to make as the owner of those shares.

No scam at all. The person buying them may end up making a lot of money or potentially end up owning a decent number of shares.

You can't just call it a scam when it's not one. They're making you a offer for your shares. You either accept or decline it accordingly.

A easy example is selling your house. Anyone here sold a house below GV??? Do they feel ripped off maybe they do maybe they don't it's about the motivation for selling.

Even with a unsolicited approach as some of you are getting it is down to you the owner if you take the offer or not.

NonprayingMantis

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#422497 29-Dec-2010 21:51

yeah,not a scam at all
The only way it could be considered a scam if the letter makes claims about the future value of the shares, or lies about their current price. as far as I can tell, it does neither.

It's no different from somebody making a speculative pre-auction lowball offer on a house, or asking for a very low buy-now on a trademe auction.