AMP Ltd shareholders who have received an unsolicited offer of A$2.29 per share from Share Buyers Pty Limited are likely to get significantly more money for their shares by selling through a sharebroker.
The offer was made by Share Buyers Pty Limited, a private company registered in Australia two weeks ago and operating out of Newmarket, Auckland.
The company offered to pay A$3.06 per share less than what the shares were worth on the 26th of July when the offer was first made. "While the offer appears to comply with the letter of the law, it undervalues small shareholders' holdings in AMP and looks like a bad deal" said Consumer NZ Chief Executive Sue Chetwin.
"When an offer is substantially below the market price, investors should be wary. It is likely that they will do a lot better selling their shares through their usual service provider.
"Inexperienced or elderly shareholders, or those who are feeling the financial pinch, may be the most likely to skim over the fine print and accept the offer without understanding the implications. We would encourage them to seek professional advice before deciding what to do."
Unsolicited offers like this have been a problem in Australia for a number of years. And AMP investors have been targeted before. It seems the New Zealand market has now caught the attention of those out to make some easy money.
In 2006 the Australian Securities and Investment Commission issued a warning about Direct Share Purchasing Corporation Pty Limited which made unsolicited offers to buy AMP shares at a price which was A$4 per share below the market price.
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Just one more example of the latest of these share spams based out of Melbourne. The above company was registered in July 2010 (according to the Australian Companies office) and is one of many derivations of similarly titled and official looking company names. This one is aimed at AMP shareholders. They come and go once they have received more attention than they prefer from consumer and investment advisers.
David Tweed is one such example, so well known that his tactics have the honour of being documented in Wikipedia... http://en.wikipedia.org/wiki/David_Tweed
These scams are now required to at least include information on the current share value (as opposed to their megre and usually comical offer) but they are still designed to deceive and con the uninformed, misguided or desperate few. It is a bulk mailout afterall and they work on the basis of a few percentage points of success. The sad but funny aspect of all this is that for the few minnows they catch, they frequently make payment on the share transfer after they on-sell them for a 100% or greater profit.
If you receive one of these letters, offering below market valuation, ignore it with the contempt it deserves. But before you discard it to the bin, consider cutting off all identifying details concering yourself and mail the remaining pages back to the send using the pre-paid envelope. Small social justice but it will add to their postage overheads and save the local landfill.
I have some AMP shares, but know absolutely nothing about shares and how to deal with them. I received that share offer and I am relieved to read Consumer's advice. I had thought they had an almighty cheek to make an offer so far below the price listed in the paper. Very glad to have that confirmed and happy to hang on to my shares!!!
I have recommended to clients to put the offer in the bin.
Both ASIC & NZSEC should send a stern warning to Share Buyers Pty Limited for their unsoliticed approaches.
I've had these scam letters twice previously over the last 5 years.
On both occasions I was offered exactly half of the current market value.
I gather the perpetrator has a long track record of trying this on.
Thank you for again bringing this to our attention.