Low ball share offers

The Herald reports:

The boss of New Zealand’s investment watchdog says he doesn’t like “low-ball” share offers but won’t be telling the Government to ban them because that would be going too far.

Several top executives including Vector chairman Michael Stiassny and Tower managing director Rob Flannagan have said the offers should be stopped after shareholders received offers to buy shares at a significant discount to what they trade at on the sharemarket.

But Sean Hughes, chief executive of the Financial Markets Authority, said there had to be some element of buyer beware.

“We can’t stand over shareholders and say ‘don’t sell’. It’s not the place of the regulator. That would be giving investment advice.”

Absolutely. If you are so stupid you accept an offer for well below what you can get on the NZX, you’re probably too stupid to be buying shares in the first place.

The rules should ensure offers are not deceptive etc. But going beyond that to ban low ball offers would be wrong.