Golden Energy shares have trebled this year, but potential buyout hints they are still undervalued

FIVE months since a key Australian subsidiary of Golden Energy and Resources : AUE 0% (Gear) completed what it deemed a “transformational” acquisition of metallurgical coal assets Down Under, the Singapore-listed miner may be set for another deal – as the target of the Widjaja family of Indonesia’s Sinar Mas empire.

On Monday (Oct 10), Gear, which owns one of Indonesia’s largest coal miners – Golden Energy Mines – revealed that it was in talks with certain shareholders, including Indra Widjaja, on a “possible acquisition” of the company. No concrete outcome or definitive agreement has emerged from the discussions.

One factor that may have prompted this latest consideration, say observers, is that Gear is undervalued. On Monday, Gear’s stock hit a high of S$0.935 on the back of the news. It closed at S$0.905, up nearly 8 per cent from last Friday’s finish. It was hovering at the same level on Tuesday.