Stock of Macquarie Infrastructure International Fund (MIIF) saw active trading today with over 6m shares changing hand. The stock is currently at 29 cents, up 16%.
Trading interest is likely triggered by the announcement that The Canada Pension Plan Investment Board, the country’s 2nd biggest public pension manager, agreed to pay A$1.37b (US$940m) cash for Macquarie Communications Group (ASX: MCG), a sister fund under the Macquarie Group, adding investments in television and radio transmission towers.
The price paid represents a premium of 60% over MCG’s last traded price of A$1.50.
One of the key assets owned by MCG is a 48% economic interest in Arqiva, a broadcast transmission operator based in the UK. MIIF also owns 8.7% of Arqiva, valued at S$330m, representing 25% of its asset portfolio as of Dec 08.
** Comments **
While there is no immediate offer for MIIF’s 8.7% stake in Arqiva, the deal is taken positively by the market as the premium offered suggest that infrastructure plays may be undervalued after being de-rated in the wake of the global credit crunch.
Funds under the Macquarie Group, including MIIF, have massively under-performed the market in the past 12 months, as investors remains wary of the high debt loads of these infrastructure funds. Macquarie has been one of the most aggressive acquirers of infrastructure assets during the boom years, fuelled by cheap borrowing costs.
Stock currently trades at 70% discount to its latest net asset value of S$0.97/share. Based on management’s guidance of 6 cents dividend, stock is yielding 20%
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Stock of Macquarie Infrastructure International Fund (MIIF) saw active trading today with over 6m shares changing hand. The stock is currently at 29 cents, up 16%.
Trading interest is likely triggered by the announcement that The Canada Pension Plan Investment Board, the country’s 2nd biggest public pension manager, agreed to pay A$1.37b (US$940m) cash for Macquarie Communications Group (ASX: MCG), a sister fund under the Macquarie Group, adding investments in television and radio transmission towers.
The price paid represents a premium of 60% over MCG’s last traded price of A$1.50.
One of the key assets owned by MCG is a 48% economic interest in Arqiva, a broadcast transmission operator based in the UK. MIIF also owns 8.7% of Arqiva, valued at S$330m, representing 25% of its asset portfolio as of Dec 08.
** Comments **
While there is no immediate offer for MIIF’s 8.7% stake in Arqiva, the deal is taken positively by the market as the premium offered suggest that infrastructure plays may be undervalued after being de-rated in the wake of the global credit crunch.
Funds under the Macquarie Group, including MIIF, have massively under-performed the market in the past 12 months, as investors remains wary of the high debt loads of these infrastructure funds. Macquarie has been one of the most aggressive acquirers of infrastructure assets during the boom years, fuelled by cheap borrowing costs.
Stock currently trades at 70% discount to its latest net asset value of S$0.97/share. Based on management’s guidance of 6 cents dividend, stock is yielding 20%
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