Aviva investors have been urged not to fall into a "trap" set by a US predator looking to buy shares on the cheap, as pressure mounts on regulators to act.
Campaign group ShareSoc is the latest to speak out after it was revealed last month that Litani had written to 100,000 of the insurer's individual investors offering them £5.30 for each of their shares.
The value of the so-called "mini-tender offer" is well below the closing price of £7.07 recorded the previous night, meaning anyone who accepts Litani's offer will lose out.
ShareSoc condemned the American investment firm's tactics and called on the Financial Conduct Authority to step in and protect Aviva shareholders. Aviva has already written to its retail investors, including those who received shares through the demutualisation of Norwich Union, to urge them against accepting Litani's offer.
ShareSoc echoed that warning, telling shareholders to check the market price before doing anything.
ShareSoc calls for FCA scrutiny
ShareSoc said the mini-tender was, in practice, nothing more than a trap for those who have not fully understood its terms. The group said it was calling on the FCA to give the practice urgent scrutiny and to issue a clear warning to consumers, and said it supported Aviva's warning to its shareholders.
Former pensions minister Baroness Altmann has also spoken out, saying her blood was boiling and calling the offer a cynical attempt to exploit vulnerable shareholders.
Details of the offer
The mini-tender offer is believed to be the first of its kind in the UK. In its letter to Aviva investors, Delaware-based Litani offers to buy up to a million shares on a first come, first served basis. The offer runs until January 29.
Aviva has a retail shareholder base of about 500,000. The insurer was formed through a series of mergers, notably absorbing former mutual Norwich Union. When the society demutualised, members were awarded shares.
An FCA spokesman said shareholders are under no obligation to accept any offer, and should consider carefully all available information before deciding, and may wish to seek advice before doing so.
