Broker snap: UBS ups target for Mondi after Swiecie investment

12th Apr 2012 10:50

UBS has raised its tagged for paper and packaging firm Mondi from 550p to 570p after the group yesterday raised its holding in Mondi Swiecie.The acquisition of an additional 27.2% of the issued share capital of Mondi Swiecie has raised the firm's total interest in its subsidiary to 93.2%, and has cost Mondi around €235m. "Having obtained the minimum 24% acceptance by minorities, we believe that the remaining minorities can be squeezed out although we see this as a potentially drawn out process," the broker said."We are attracted by Mondi's low cost position, strong balance sheet, restructuring actions (likethe Swiecie acquisition), and strong management. However, we see value as less compelling after its recent strong performance and given still uncertain macro/mixed pricing dynamic."However, while it still believes that the company is "well-positioned for when the cycle does improve", the broker maintains its neutral rating on the stock.Shares were up 1.19% at 551p by mid-morning trade.BC