excerpt from broker report recommending TTXPA ("TAPS") over HDF....

excerpt from broker report recommending TTXPA ("TAPS") over HDF. At price of 75, I make IRR slightly higher than broker at 31% per annum assuming cash payout.


UK February RPI inflation was 0.0% suggesting a large negative inflation event in March affecting UK regulated water utility gearing levels and asset values is less likely. Given this and the fall and subsequent partial recovery in the HDF price since we published our SELL recommendation (6 March) we moderate our recommendation from SELL to HOLD maintaining our TP of 60c. Potential dilution from HDF being pushed into a TAPS conversion event in 2010 will likely weigh on the share price until the upside from an asset sale is realised. We suggest the TAPS hybrid as a lower risk option for investors interested in the HDF story with IRR of ~29% pa on current prices.