Vector hires Goldman Sachs after gas lines attract potential buyers

Vector says a potential buyer has expressed interest in its gas transmission business. Photo / Thinkstock

Vector, the Auckland gas and electricity distribution company, has hired Goldman Sachs to review its gas lines business after an unnamed party expressed interest in buying its gas transmission businesses.

The company hired the investment bank to "assess the strategic options" for those businesses after they attracted unsolicited interest in recent months, Vector said in a statement. While that's underway, the company will continue to plan on the basis of its existing portfolio.

"Whilst the board and management of Vector believe these are highly attractive assets, we constantly review our portfolio and will always consider offers which maximise value for our shareholders," it said.

Vector's gas business has almost 162,000 customers, and operates a transmission system spanning 2,286 kilometres, generating revenue of $96.1 million in the six months ended December 31, for a profit of $57.5 million.

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Last year, the company bought Meridian Energy's Arc Innovations electricity meters, and Vector has been expanding into providing telecommunications transmission as it seeks to diversify earnings away from its regulated electricity lines business.

Vector shares last traded at $3.15, and have gained 13 percent this year. The stock is rated an average 'hold' based on six analyst recommendations compiled by Reuters, with a target price of $3.15.