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The Expert View: Aberdeen Asset Management, UTV, Enquest
by Chris Marshall on Aug 28, 2013 at 05:01
Too soon to change stance on deal-making BBA
Too few details are available on BBA Aviation’s discussions to merge with parts of Dubai Aerospace Enterprise to change investors’ stance towards BBA Aviation (BBA.L), say analysts, with Westhouse’s Kevin Fogarty keeping his ‘add’ recommendation on the shares.
The aircraft services company confirmed talks to merge with parts of Dubai government-owned DAE on Tuesday, while also announcing it had bought US firm Maguire Aviation.
Fogarty said: ‘Any major transaction is likely to significantly enhance the market position of BBA’s Aftermarket Services and Systems activities, which currently generate the highest divisional margins for the group and comprises c. 43% of group profitability. ‘
But it is too soon for the talks to prompt any change to Fogarty’s estimates: ‘Management has confirmed that any ongoing discussions with DAE may not result in a transaction, and with no further details available regarding a potential transaction we make no changes to our estimates. We retain our 320p target price and Add recommendation.’
Shares in BBA closed 0.9% higher on Tuesday, at 310p.
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