Lord Lee has locked horns with the Takeover Panel over concerns that small investors are being kept in the dark regarding lucrative deals.
The former Tory MP, now a Liberal Democrat peer, has written to the regulatory body asking it to change its rules to ensure savers are kept in the loop when a company they own may be bought.
He thinks that thousands of small investors are missing out on stellar returns because they do not know a company is in takeover talks.
Concern: Lord Lee thinks that thousands of small investors are missing out on stellar returns because they do not know a company is in takeover talks
They may sell their shares ‘because they need to build a garage extension or make repairs to their home’, he said, without realising that the stock is about to rocket just days later when the company announces it is about to be snapped up.
Lee told the Mail: ‘The more I think about it, the more conscious I am that there must be a lot of private investors who sell shares in companies where there were serious takeover talks taking place and they were in total ignorance.
‘They sell their shares and then bang – they open the paper the next day to see a takeover has been announced and the shares are up 50 per cent,’ he said.
A company must tell investors when a suitor has declared ‘a firm intention to make an offer’.
But Lee argues this is far too late, and investors should instead find out when a company has received a ‘serious’ takeover approach.
The Takeover Panel’s chairman Michael Crane argued rules are adequate because a company must announce a deal if information leaks out.
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