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Macquarie has downgraded APA to Neutral from Outperform, after the company announced a $1.3 billion scrip deal to acquire fellow pipeline operator Envestra. APA has slumped on news of the takeover, falling from $6.38 to $6.00 or -6.0% in the two days after the announcement. The downgrade to neutral brings Macquarie's recommendation in line with Citi and CIMB Securities, whilst JPMorgan, BoA Merrill Lynch and Credit Suisse remain underweight on the company. Brokers are cautious over the deal, given APA owns 33% of ENV, manages its assets and the all scrip offer could be dilutive.


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