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Leading Analyst Hits Back at Liberty Share Issue

LONDON-Deutsche Bank has hit back at this week's share issue by Liberty International and cut its recommendation to "sell" from "hold".

By Anita Howarth | Updated on November 07, 2002

LONDON-Deutsche Bank has cut its assessment of Liberty International to “sell” from “hold” and lowered its target price to 500 pence a share from 550p following the company’s issue of new shares.

The move is in response to the issue by Liberty earlier this week of 28.4 million new shares raising £159 million ($251 million) in the process. But Deutsche analysts said in a research note: “We are perplexed by the share issue as there seemed to be little need for the company to seek additional shareholder equity.”

The report said that it appeared the company issued the shares in an attempt to enter London’s elite FTSE 100 index. But the resulting 2.4% stock dilution meant Liberty shares were expensive at 24 times 2002 earnings.

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