Yell hit hard amid directories sell-off

LONDON (Reuters) - Directories business Yell Group (YELL.L), which will leave the FTSE 100 index next week, fell 11.5 percent to new lows on Monday amid a sell-off among peers in Europe and the United States.

Yell was down 19.3 pence at 148p in afternoon trade, making it one of the biggest losers in the blue-chip FTSE 100 .FTSE amid the broader retreat in global equity markets.

The company will fall out of the FTSE 100 on March 26 due to the drop in its market capitalisation. The shares have fallen from a 52-week high of 622p early last year amid ongoing investor concerns about the resilience of a business model based on printed directories amid the surge in online-related search.

Yell Chief Executive John Condron in a recent Sunday Times newspaper interview was quoted as saying: "The perception is that the business model is broken. It is emphatically not."

In an interview in the Financial Times published Monday Condron said Yell's lending covenants were not in danger and he still expects to see growth in the United States despite rivals guiding to declines.

Broker Goldman Sachs cut its price target on Yell to 174p from 328p although kept its "neutral" rating.

UBS said it remains wary on Yell given its leverage of five times net debt to underlying earnings.

"Near-term, we remain cautious about downside risk to both the U.S. and UK and believe that near-term cyclical pressures could affect longer-term growth as advertisers question the value of print directories longer term," UBS said in a note.

In Italy, yellow pages publisher Seat Pagine (PGIT.MI) Gialle Spa (PGIT.MI) was 10 percent lower at 0.142 euros while in New York Idearc Inc IAR.N was off 9.7 percent at $4.09 with R.H. Donnelley RHD.N 8 percent lower at $4.72.

(Reporting by Gavin Haycock; Editing by David Cowell)