Spark Infrastructure – Remove the Board Handbrake and Realise $2.75 If, as I believe, Spark Infrastructure’s shares are worth $2.75, a rational explanation for the 45 cps undervaluation is needed.
The best answers lie in an unnecessarily low distribution/yield and the expectation the Company will repeat the TransGrid experience, paying an excessive price to acquire Endeavour Energy which is currently being auctioned. Last year’s results show clearly the strength of the assets Spark has held since its IPO and the drag on performance and distributions caused by the investment into TransGrid.
Spark shareholders would be better served by the Company avoiding large, expensive acquisitions and getting back to the basics of an investment trust – prudent financial policies, high distributions and avoiding negative surprises.
Following last year’s deserved 34% vote against the Compensation Report counting as strike one, shareholders have a rare opportunity to complete strike two and a Board spill.
I am standing again for election, advocating a shift back to the conservative financial approach of a prudent investment trust.
My case for a $2.75 stock price is outlined in detail here.
James Dunphy was an investment banker for 27 years and a Managing Director and Group Head at Credit Suisse and Moelis & Company. James continues to provide investment banking advisory services and is an active investor in both public and private...
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