U need to understand how MCG in Oz generates business. Its hit a flat line with not much room for growth & has similar sort of operations in the UK albiet with more Towers & even dead mkt.
Problem with MCG (& Broacast Australia specifically) is their net debt, it's 10.4 times their earnings (read my BRW post).
BA's Net debt: $952.2m
Ebitda: $91.325m
Debt/Ebitda: 10.42
MCG on the other hand has a debt of $5.494b
Ebitda: $326.2m
Debt/Ebitda: 16.37
In all its not a bad deal, $700m invested in BA by MCG few years back has an offer double that figure. As it is, they are struggling with earnings to repay existing debt, hence the $2.50 offer.
cheers
MCG
macquarie communications infrastructure group
