IFM Investors, the largest shareholder in Atlas Arteria with a 35.68% stake, has launched a hostile A$6.9bn (€4.2bn) bid to acquire the remaining shares of the Australia-listed toll road operator, which owns assets in France, Germany and the US.
IFM Investors has offered to acquire the remaining shares of Atlas Arteria for A$4.75 per security in cash, representing a 9.7% premium to the last closing price, with a provision to increase the offer to A$5.10 should its total interest reach at least 45% before the bid closes.
The offer came from Diamond Infraco, an investment unit of IFM Global Infrastructure Fund, which holds a 34.48% stake in Atlas Arteria. Other IFM funds own another 1.21%, giving IFM Investors total voting rights of 35.68%.
Atlas Arteria has established an independent board committee to consider the offer which would update shareholders in due course.
Atlas Arteria owns a 30.8% interest in the 2,424km motorway network located in France and a 100% of the Warnow Tunnel in the north-east city of Rostock in Germany. Its assets in the US include a 66.67% interest in the Chicago Skyway, in Chicago and has 100% of the economic interest in the Dulles Greenway, a 22km toll road in Virginia.
In a statement, Diamond told shareholders that Atlas Arteria had underperformed across several key operational areas, including failure to deliver any increase in distributions over the last four years, a significant increase in corporate costs, and failure to achieve toll rate increases or any amendments to the Dulles Greenway concession framework in the US.
“Atlas Arteria has recently indicated that it is actively looking at new M&A opportunities with funding flexibility. This is a material change from Atlas Arteria’s previous position, which explicitly ruled out equity funding in relation to new opportunities. This is also a change to Atlas Arteria’s position adopted post the Chicago Skyway acquisition in 2022, that it was not pursuing M&A, other than growth opportunities directly related to or in proximity to its existing businesses.
“Bidder has made known to the Atlas Arteria Board and management its strong concerns about this recent change in strategic direction to pursue M&A more broadly. Bidder wishes to avoid a repeat of what it regards as the shareholder value destruction associated with the Chicago Skyway acquisition in 2022,” according to the statement.
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