Toll road operator Atlas Arteria has urged its shareholders to reject a takeover offer by institutional investor IFM.
At the end of April, Atlas announced it had received an off-market takeover bid from IFM for all shares it did not already own for $4.75 cash per security, valuing the company at almost $7 billion.
IFM has invested in Atlas, which is headquartered in Melbourne and has interests in five major international toll roads in the US, France and Germany, since March 2022 and currently holds a 34 per cent stake.
IFM Investors is a $232 billion global asset manager, founded and owned by pension funds, with capabilities in infrastructure equity and debt, private equity, private credit, real estate and listed equities.
In a shareholder update, Atlas said IFM’s bid is “too low, opportunistic and highly conditional’. It is also concerned IFM is trying to take advantage of the low share price because of the Middle East conflict and foreign exchange and interest rate movements.
Shares in Atlas Arteria are currently trading at $4.79 and are down by 7 per cent over the past 12 months compared to gains of 6.4 per cent by the ASX 200 over the same period.
Its resistance to the bid sat in multiple areas:
- The offer materially undervalues Atlas Arteria as being below its fundamental value and the takeover premium.
- The offer is opportunistic in its timing
- The offer is designed to accelerate IFM’s creep to effective control of Atlas Arteria
- The offer is subject to extensive conditions – some which are already incapable of being satisfied
- IFM’s position is expressed as ‘best and final’ but more value may be available for Atlas Arteria shareholders
- The directors of Atlas Arteria have been pursuing various initiatives to optimise value for shareholders including portfolio optimisation and asset recycling.
- There are structural deficiencies with the offer and disclosure in the bidder’s statement.
Atlas Arteria chair Debbie Goodin said “This hostile, highly conditional takeover offer from IFM is opportunistic and materially undervalues Atlas Arteria.
“The offer is designed to accelerate IFM’s creep to effective control of Atlas Arteria without paying a fair premium to securityholders.
“The independent directors of Atlas Arteria recommend that securityholders reject the offer. The boards and management remain focused on continuing to deliver on the strategy to optimise company value and create value for all securityholders.”
