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Vector to buy back 2.5% of its 'undervalued' stock

Friday 1st August 2008

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Vector, the utility that sold its Wellington network to Hong Kong interests for NZ$758 million, plans to buy back about 2.5% of its stock to bolster the price.

The company will announce details of the buyback after its annual results are released on August 27, it said in a statement. It plans to buy back as much as 25 million shares, worth NZ$54 million at today's price of NZ$2.16.

"Vector's board currently believes its shares are undervalued by the market and therefore represent an attractive risk-return proposition for its shareholders," chairman Mike Stiassny said. The company will initially hold the shares as treasury stock.

Vector shares have declined about 10% in the past two years while Contact Energy, the biggest energy company on the NZX 50 Index has gained almost 20%.

Net profit in the first half fell 18% to NZ$90.7 million.

By Jonathan Underhill

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