Sharechat Logo

Report sets fair price for TrustPower

By Phil Boeyen, ShareChat Business News Editor

Monday 28th May 2001

Text too small?
An appraisal report into energy firm TrustPower (NZSE: TPW) says a fair price for the company would be in the range between $3.23 and $3.62 per share.

The report comes in the wake of notices from several interests who have indicated they want to increase their holding in the company.

US-based Alliant, utilities investor Infratil (NZSE: IFT), and Tauranga Energy Consumers Trust all want to up their stake, while The Australian Gas Light Company (AGL) is looking to take 100%.

Alliant and the Tauranga-based trust have indicated offers between $3.20 and $3.60 for more shares while Australian Gas Light's offer is in a range between $3.30 and $3.60.

The report states it has valued TrustPower primarily by valuing each of its major business units on an unbundled basis, principally using the discounted cash flow approach, which it has tested against comparable market transactions.

"Our primary valuation approach has been cross checked against the value arrived at using conventional comparable company analysis, which is significantly lower," the report says.

Taking both approaches together the report says the fair market value for the company's shares are between $3.23 and $3.62.

The report also says there are prospects of bidding competition between the parties that have issued notices.

"Various scenarios could emerge including the securing of control by Alliant an Infratil via the AGL parcel, or a continuing absence of outright control by any company.

"Furthermore there is a good prospect that one or more unrelated parties may emerge to bid for full control of TrustPower at prices beyond our assessed fair value range."

TrustPower shares have been trading Monday above $3.50.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

TrustPower, Ngai Tahu Holdings may invest $106M in Ruataniwha water scheme
TrustPower generated less energy for fewer customers in the first quarter
Transpower to pay government special div of $65.7M from d-cyphaTrade sale
Transpower sells derivatives trading unit d-cyphaTrade to ASX for A$55 mln
TrustPower pays $13.7 million for Energy Direct NZ to widen customer base
TrustPower FY earnings fall 6 percent on dwindling customers, thinner margins; shares gain
TrustPower sets interest rate on seven- year bonds
TrustPower looks to raise $125M in bond sale
Transpower runs $30 million over budget on North Island upgrade
TrustPower pushes margins, sheds customers for 16% earnings rise