The Australian Securities and Investments Commission has urged shareholders in listed property company Investa Property Group to be wary of an offer from Direct Share Purchasing, a company associated with David Tweed.
Yesterday, the corporate regulator said Direct Share Purchasing Corporation has offered Investa shareholders to buy their shares for a $1, less than half their market value.
ASIC’s deputy executive director Delia Rickard said despite disclosing both the market and offer price for the shares and meeting all legal requirements, this offer is a bad deal because it substantially undervalues small shareholders’ Investa holdings.
“When you get an offer where the price is well below the market price, you can do a lot better selling the shares through a sharebroker.
“As one shareholder noted, this latest letter appears to be an official document, like many genuine buy back offers that are made by companies,” Rickard said.
“Inexperienced or elderly shareholders, or those under immediate financial pressure, are often most at risk of selling their shares without carefully reading the offer and clearly understanding the implications.
“Investa shareholders who receive this offer and don’t just throw it in the bin, should obtain professional financial advice if they are considering accepting it. Don’t sign until you fully understand that you are accepting a price which substantially undervalues your shares,” she added.
Rickard said although it is not against the law to make an unsolicited offer to buy someone’s shares, it is illegal to mislead or deceive shareholders into accepting an offer.
“The offer must also comply with strict legal requirements, including the prohibition against misleading or deceptive or unconscionable conduct,” he added.
ASIC’s consumer website FIDO at www.fido.gov.au contains more information, along with seven safety checks regarding unsolicited share offers. Alternatively, phone Infoline on 1300 300 630.
Investa shares closed at $2.21 yesterday.
By Nelson Yap
