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.
