Atlas Arteria surges after IFM snaps up 15% stake, hints at takeover bid

Australia’s Atlas Arteria surged 15% on Wednesday after fund manager IFM Global Infrastructure Fund acquired a 15% stake in the issued securities of the tollroad operator and hinted at a potential takeover attempt.

Atlas, which owns tollroads in France, the U.S. and Germany, said the acquired stake, valued at about A$1.02 billion ($737.05 million) as per the stock’s last close, includes securities acquired by Melbourne-based IFM after market close on Tuesday at a price of A$8.10 per security.

Shares of Atlas Arteria jumped 15.2% to A$8.18 at 00:14 GMT, above IFM’s purchase price, indicating shareholder confidence in the possibility of a takeover transaction.

IFM told Atlas that it intends to ask for access to information to assess whether it can make an indicative takeover proposal to buy all of Atlas’ shares that it does not already hold, the tollroad operator said.

“Atlas Arteria has not yet received any such request for information nor any proposal from IFM to acquire additional securities in Atlas Arteria.”

IFM said in statement that it “has made no formal control proposal to the ALX board and intends to initially request from ALX access to certain limited company information, before deciding whether to submit a non-binding indicative proposal to ALX.”

It added that there is no certainty of progressing to a binding proposal.

Pension funds globally have been eyeing transport infrastructure assets, which normally generate dependable income, as a result of ultra-low interest rates during the pandemic.

Shrinking valuations of assets due to uncertainties about the timing of a return to regular travel patterns have also heightened appetite.

If the potential deal goes through, Atlas would join a number of listed infrastructure businesses that have vanished from the Australian Securities Exchange over the last year, including Spark Infrastructure and AusNet Services, as large investment and retirement funds seek long-term assets.

Last year, a consortium of pension fund investors, including IFM, agreed to a $17.5 billion takeover of Sydney Airport, one of Australia’s largest.

Atlas Arteria was valued at about A$6.81 billion($4.9 billion), according to its Tuesday’s closing stock price.