Yellow Media Inc T.YLO

CIBC cuts Target to ZERO

[coffintrader]

Never seen something like this before. UPDATE 1-CIBC sees little equity value in Yellow Media10:13 AM Eastern Daylight Time Sep 29, 2011* Says no suitors likely for the company at this point* Expects to see no improvement in operating metrics in Q3* Cuts price target to C
from C$1.25Sept 29 (Reuters) - CIBC World Markets downgraded Yellow Media Inc to "sector underperformer," saying business pressures along with a troubled capital structure will put pressure on the underlying equity of the Canadian telephone directory publisher.On Wednesday, Yellow Media, which has been struggling to manage its debt while it switches to a digital platform, said it would take a C$2.9 billion charge in the third quarter and stop paying dividends. [see story]"We previously believed that a modest equity value could be carved out of the story, (but) that no longer appears to be the case," said CIBC analyst Robert Bek and cut the price target on the stock to C
from C$1.25.The company has faced declining demand for print ads in its Yellow Pages and related directories and has had difficulties selling online ad space.Given the debt position and the type of business Yellow Media operates in, it does not seem like there will be any suitors for the company at this point, Bek said in a note."We do not expect to see a bump in operating metrics looking ahead into the third quarter, or in the near term beyond the next quarter," said Bek, who earlier had a "sector performer" rating on the stock."But even if we did, Yellow Media would need several quarters of pretty solid performance given where the stock has traded over the past," he added.The stock, which is now worth about 50 times less than it was in 2007, was down 11 percent at 25 Canadian centson Thursday morning on the Toronto Stock Exchange .It was one of the top percentage losers on the exchange.National Bank Financial also cut its price target on the stock to C
.25 from C
.80.(Reporting by Bhaswati Mukhopadhyay in Bangalore ; Editing by Supriya Kurane) (([e-mail]; within U.S. [phone]; outside U.S. [phone]; Reuters Messaging: [e-mail]))