2230 GMT [Dow Jones] STOCK CALL: Merrill Lynch cuts Macquarie Communications (MCG.AU) price objective to A$3.90 from A$4.70. "Concern around MCG's exchangeable bond refinance, gearing and distribution are weighing heavily on the price. Management insist they have time to address investor concerns, but investors are right to demand action given price underperformance," analyst says. Says group has number of options to address concerns, including cutting distributions or selling stakes in assets. "The most likely asset sale candidate is Arqiva given recent demand from MQG unlisted and third party investors and the fact that Arqiva currently represents around 50% of MCG's total value." Equity raising would be the last resort. Still, keeps Buy rating on stock. "In our view, MCG offers compelling value and this should be recognized once investors shift their focus from capital structure to operations." MCG last at A$1.41. (LMF)
MCG
macquarie communications infrastructure group
