Macquarie has downgraded APA to Neutral from Outperform following news of the company's attempt at a merger with Envestra (ENV). APA has offered 0.1678 APA shares and a $0.03 dividend in August which amounts to a bid price of $1.10 at the time of the offer. Macquarie views the deal as unnecessary given APA already owns 33% in ENV and manages the assets. The broker notes that the company is conducting a dilutive takeover by using scrip. The target price has been cut to $6.38 (current price $6.23) with a PER of 25.22 based on last closing share price.