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ASX-listed Energy Developments is to investigate options for the sale of some or all of its assets after agreeing with majority shareholders, including Lloyd Morrison's Infratil, that the company is undervalued by the sharemarket.
Yesterday the Brisbane-based company, which has various landfill and coal seam gas assets and power station developments in Australia and around the world, said it would "review a variety of options with the objective of maximising value for all the company's shareholders".
Managing director Greg Pritchard said the review had been initiated after feedback and discussions with a number of major shareholders over the past several weeks.
The views of major shareholders, including 30 per cent owner Infratil, "are consistent with our views that the current share price may not fully reflect the underlying value of our assets in our portfolio".
Energy Development's shares have taken something of a battering in recent months. They began the year trading at A$3.84 but sank as low as A$1.60 in April after a glitch at its West Kimberley power project.
Yesterday they were trading up 20c at A$2.50 after the announcement.
Infratil, which paid A$3.56 a share for its original 10 per cent stake in the company six years ago has been buying more shares as recently as the past couple of months, when it moved from 29 to 30.04 per cent.
Infratil has agreed not to sell its stake in the company until August 18, an agreement Pritchard said would likely be extended if the review process, expected to take three to six months, is not completed by then.
Infratil chief executive Lloyd Morrison yesterday refused to say much more about Energy Development's review other than "we support it". Neither he nor Pritchard would confirm the review was prompted by Infratil.
Energy Developments, at the current price, has a market capitalisation of about $A$385 million. Infratil shares closed 6c higher at $1.83 yesterday having hit a year low of $1.75 on Thursday.
