Macquarie Infrastructure Group Update (MIG)

Macquarie Infrastructure Group have a Buy 1 recommendation and a share price target of $3.80 per share from Australian stockmarkets analyst UBS. Potential bid for APRR by SACYR : French Market Regulator: SACYR must bid for Eiffage & APRR: The French market regulator has ruled that SACYR has been acting in concert with other Spanish shareholders (with respect to acquiring a majority stake in Eiffage) and must now bid for all of Eiffage. Eiffage is the majority owner of APRR with a 40.7% stake (MIG 20.4% & MEIF 20.4%). The regulator has also ruled that APRR is a substantial asset of Eiffage, and as such SACYR is now required to bid for APRR minorities (SACYR was the underbidder for APRR). MIG paid €276m for its stake in APRR (representing ~6% of MIG NTA): MIG valued APRR at €451m at Dec 06. APRR closed at €76/share which values MIG's stake at ~€585m (~30% premium to MIG NTA & 20% premium to UBSe). Media conjecture (Reuters) suggests that SACYR could pay up to €90/share. Impact to MIG: Potentially positive read through for MIG valuation of APRR (and conservative NTA in general). They estimate a sale would increase MIG NTA by up to ~15 cps (from ~$3.80), all else being equal; however cash flow coverage of distributions would fall. MIG is now ~$623m through buyback facility (~$377m remaining): MIG is currently in the pricing period for the performance fee calculation (last 10 trading days of June) and the buyback is on hold during this period. The buyback is due to commence again on 1 Jul 07 and approval expires on 23 Aug 07. MIG may apply for an extension & they expect ASIC to finalise rules for trusts in ~3 months. Their valuation is based on DCF and is $3.70 (Jun 07) with a price target of $3.80. They believe MIG represents a good buying opportunity at current levels. In our opinion, the stock has been over-sold due to concerns about bonds & the absence of the buyback.

Macquarie Infrastructure Group Limited is listed on the Australian Stock Exchange (ASX) under stock code MIG. You can view their investor website here. MIG was listed on the ASX on 16 December, 1996. Stephen Allen is the CEO for Macquarie Infrastructure Group and Mark Johnson the Chairman. Macquarie Infrastructure Group (MIG) is one of the largest developers and operators of toll roads in the world. MIG has a geographically diversified portfolio of 11 toll roads across seven countries, and a track record of successfully integrating significant, complex businesses. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade MIG. Check your charts and good luck with your share trading!