A former client of mine got a letter in the mail last week.
It looked very similar to other letters you might get directly from the company (for example if the company was involved in a merger or takeover).
Here is what it said:
HFSS offers to buy the 544 BHP shares you own for $8,611.52 on the terms set out below and on the enclosed Acceptance Form (the Offer). The market value of your shares is $21,134.40. The Offer price per share is $15.83. The market value of a BHP share on the date of this offer was $38.85.
So is this a good deal?
Sell shares you own worth $21,134.40 and get $8,611.52. Yep – sign me up! (sarcasm just in case you didn’t pick it).
Why would anybody sell their shares for less than they are worth??????
In previous letters like this I’ve seen, they didn’t give you the market value of the shares. So some people might have accepted the deal because they didn’t realise the share price was much higher than the offer price.
Why doesn’t the company (or ASIC who regulates companies) stop this?
This is currently within the law. Obviously it is deceptive and really a scam that really prays on those less financially astute and the elderly. But it is still legal.
Selling Shares you own
For those that have shares but don’t have a broker – if you provide your share documentation to a broker they can usually sell your shares. You will pay brokerage on the transaction – but you will be a lot better off overall than selling them to an unsolicited share offer.