Macquarie Equity Research has downgraded Spark Infrastructures following yesterday's move on the DUET share register

Macquarie Equity Research has downgraded Spark Infrastructures following yesterday's move on the DUET share register. Simultaneously the broker has issued an upgrade to outperform for DUET highlighting a takeover premium they expect to be priced into the stock in the year ahead. On Spark (SKI) Macquarie says, there are limited synergy benefits from merging the two businesses as all the assets are unique with different ownership structures. We struggle to see the strategic benefit, particularly if an additional premium needs to be paid. Downgrade to Underperform. Macquarie says the derivatives arrangement between Spark and Deutsche Bank to assist in building Sparks position in DUET will provide price support. We believe DB will be incentivized to purchase stock over the period of 20 November 2014 - 19 at above its breakeven point of $2.50 per DUE share. We lift our recommendation to Outperform.