KEY POINTS:
King Country Energy's independent directors are set to recommend a shift of its share quote from the Unlisted share-trading facility to the NZX.
They disclosed the plan as they rejected Todd Energy's $82.5 million bid for King Country as too low and said they had received an expression
of interest from a rival party.
The directors, led by chairman Tony Palmer, said they were considering the move to the NZX or the NZAX because they did not believe the underlying value of the firm was reflected in the trading of shares through Unlisted.
They believe trading will be boosted on the NZX and, as a result, the share price will more accurately reflect the company's value.
"If the Todd offer is not successful, the independent committee intend to encourage the full board to consider listing King Country Energy shares on either the NZSX or the NZAX markets," the directors said.
The board has previously rejected a move to NZX, although its reasoning is not clear. However, the independent directors' views resonate with criticism that Unlisted's weaker controls on companies dissuade investors from trading across the platform.
King Country's shares on Unlisted rose 2.8 per cent to $4.80 - well ahead of Todd's offer of $4.40 a share.
The directors said the rival interest was "from a party that has the financial resources, industry knowledge to enable it to make an alternative offer". But they warned that there could be no assurance an alternative proposal would emerge.
The independent directors' recommendation follows a report from corporate adviser Grant Samuel valuing King Country's shares in the range of $4.80 to $5.26
The directors said the offer price was well below the bottom end of the final valuation range, below the current share price and was lacking a premium for control of the company. Todd's offer is conditional on it acquiring 50 per cent of the shares on issue.
They also said the offer took no account of impending controls on carbon emissions, which are likely to increase the value of renewable power generation plants.
"The Todd offer cannot be closed early or withdrawn. Since there is no benefit to shareholders accepting the Todd offer early, shareholders should take no action."
Todd Energy was not available for comment.