The board of directors of The Colonial Motor Company Limited has today become aware that some shareholders have received an offer from Stock & Share Trading Company Pty Limited to buy their shares at $2.00 each. The current market price is $3.70.
The board recently declared a dividend of 16 cents per share payable on 26 October to shareholders registered on 12 October 2012 (the record date). The unsolicited offer expires on 15 October 2012.
The Financial Markets Authority (FMA) has released warnings about Stock & Share Trading Company Pty Limited and low ball offers in general.
Shareholders are encouraged to take note of the guidance from FMA to seek independent financial advice and check the current share price before reaching a decision. The situation is made more complicated by the timing of the offer around the period when shares may be sold cum- or ex-dividend. Inexperienced shareholders may not factor the value of the dividend into their decision making.
The Colonial Motor Company Limited (CMC) was approached in late July with a request for a copy of its share register. To comply with the law, it reluctantly provided a copy of the share register on 14 September 2012.
The Company’s 2012 annual report is being mailed tomorrow and it will enclose a letter to all shareholders alerting them to the issue.
