Why the Ariadne Australia Limited share price jumped 49% today

Ariadne Australia Limited (ASX:ARA) sells its 50% share in Secure Parking for $75 million

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Ariadne Australia Limited (ASX: ARA) share price is up nearly 50% in trading today to 53.5 cents, after the investment company announced the sale of its 50% interest in Secure Parking for ~$75 million.

The asset was held on the company's books at a value of $11 million, so the sale represents a significant premium – and clearly the market had no idea it could be worth so much – otherwise the share price would have been much higher and the rise today would have been much smaller.

Ariadne had a market cap of $73 million at last night's close of 36.5 cents – but that has now jumped to more than $107 million with the share price around 53.5 cents.

The investment company had three divisions focused on investments (securities including shares), car parking – through its Secure Parking holding and property – consisting of Orams Marine Village in Auckland and the marinas at Port Macquarie and Batemans Bay – although the marinas were sold off in March this year.

Ariadne says the proceeds from the sale of the Secure Parking asset will be reinvested into other assets, which may have dashed shareholders hopes of a special dividend or capital return.

However, if Ariadne can reinvest the proceeds into assets that deliver more capital gains and income, then shareholders should be pleased.

Excluding Secure Parking, Ariadne held gross assets worth ~$86 million at the end of June suggesting that shares may still be cheap compared to the total value of the assets. Net assets – excluding Secure Parking and $10.7 million in liabilities – were ~$75 million – but add in the proceeds of $75 million from the sale of Secure Parking and you can see that the net asset value of Ariadne is around $150 million or ~75 cents a share.

That's a rough calculation, and there's no guarantee that Ariadne's assets could be sold for book value or above. However, Foolish investors willing to dig deeper may uncover a hidden gem.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »