Boards should address undervaluation of their shares to ensure fairer treatment of minorities

Lowball offers are a reflection of the fact that nearly half of locally listed stocks are trading below book value

Ben Paul

Published Mon, Apr 12, 2021 · 05:50 AM

MANY years ago, while reporting on a group of minority shareholders resisting a lowball offer for their company from its parent, a communications professional working for the acquirer attempted to discredit the dissident investors by telling me a dirty little secret about them.

"They are just trying to make money," she grumbled.

The way this communications professional saw it, many of the dissident minority investors were simply trying their luck by pushing for a higher price. Some of these investors may in fact have jumped on the stock only after the deal was announced, in the hope that the offer price would be raised.

It seemed unfair to her that these minority investors were happy to trade the stock among themselves at less than its supposed intrinsic value, b…