Grupo Mexico gets market resistance after unveiling plans to up stake in GAP
Mexican mining company Grupo Mexico is getting some market opposition after unveiling plans to acquire Grupo Aeroportuario del Pacifico (GAP) via a public offering (Dow Jones, 15-Jun-2011). UBS downgraded GAP to neutral from buy with a price target of MXN56.50, while keeping its recommendation for Grupo Mexico unchanged at neutral with a price target of MXN40. UBS stated a USD600 million to USD700 million bid by Grupo Mexico for GAP would not significantly impact a USD25 billion market cap company which generates over USD6 billion in Ebitda (a measure of cash flow). Grupo Mexico holds about 20% of the airport operator’s shares and long been thought to want more.