Equal Energy Ltd., an oil and natural-gas producer with assets in Canada and the U.S., climbed the most in eight months after saying it’s considering options including a sale of the company.
Equal Energy rose 10 percent to C$3.33 at the close in Toronto, the biggest gain since Aug. 11. The shares have declined 27 percent this year.
The Calgary-based company has formed a special committee of directors to consider options including a sale of the company, divesting assets, a merger or acquisitions, it said in a statement yesterday after the close of regular trading.
“The board of directors believes that the company’s shares trade at a significant discount to the value of the underlying assets,” it said. The process wasn’t a result of any particular offer, Equal Energy said.
The special committee has hired Bank of Nova Scotia to advise it. It hasn’t set a definite schedule to complete the process, the company said.
Equal Energy’s shares have been trading at a “significant discount” to its net asset value, Kevin Shaw, a Calgary-based analyst at Casimir Capital Ltd., said in a telephone interview.
“I don’t disagree with what the Equal board is doing,” he said. “It’s a sizable company, they’ve got some decent cash flows and, their gas assets aside, their oil assets are worth considerably more than their current trading price.”