3 Mar 2011

Regulator to have power to control low-ball share offers

8:44 am on 3 March 2011

The new Financial Markets Authority will have the power to crack down on unsolicited and undervalued share offers.

Changes to the Financial Markets Bill will allow the super-regulator to control "low-ball" offers, such as those made by Bernard Whimp which undervalued shares by up to two thirds.

Chapman Tripp partner Roger Wallis says the changes won't prevent such bids being made, but will make them more transparent.

He says the person making the offer would have to state the listed company market price, if there is one, or a fair estimate of value.

People would have to be given a reasonable time to consider the offer.

Mr Wallis says the Financial Markets Authority will have the power to seek claims against former directors, for breach of duty.