KEY POINTS:
Vector's board says the market is undervaluing the energy company's shares so it is going to buy back 25 million of them.
The company said it would announce further details of the buyback with the annual result on August 27. The repurchased stock would initially be held as treasury stock.
Many Vector shareholders are energy consumers and so beneficiaries of the Auckland Energy Consumer Trust, the elected body that owns 75.1 per cent of Vector shares.
Beneficiaries were allocated shares when Vector floated 24.9 per cent in an IPO in 2005. Its listing price was $2.38 each. This afternoon Vector shares were trading at $2.23 each, up more than two per cent.
Chairman Michael Stiassny said the board was committed to providing attractive total returns to shareholders within acceptable risk parameters.
"Vector's board currently believes its shares are undervalued by the market and therefore represent an attractive risk-return proposition for its shareholders."
Stiassny said Vector would continue to maintain a strong balance sheet to fund capital expenditure for security of supply and on-going growth initiatives.
- NZPA
