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Grupo Mexico gets market resistance after unveiling plans to up stake in GAP

16-Jun-2011 11:08 AM

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.