Shares in Minerva have fallen 19% on the London Stock Exchange today after broker Merrill Lynch cut its rating for the property group to ‘Underperform’ from ‘Neutral’.
In a sector note, the broker also cut its price target for Minerva to 9p.
The company’s shares dropped 2.25p to 9.5p in late afternoon trading.
Merrill Lynch said after the collapse of takeover talks with Limitless there was uncertainty surrounding the company.
One of the key issues is its construction financing and whether or not the banks would step in and take control of projects. However, the broker said this was unlikely in the short term.
Merrill said Minerva’s net asset value was highly geared to the assumptions and final outcome of its six key London development projects.
“Given the uncertainty surrounding its development pipeline, no dividend yield and negative recurring income, we prefer to err on the side of caution,” the broker said.
“Consequently, we have downgraded Minerva to an ‘Underperform’.”
