Morningstar does not recommend Atlas Arteria's 'dilutive' Chicago Skyway stake buy

ALX Resources

16/09/2022 24:59

** Morningstar says Australian toll roads operator Atlas
Arteria Group's  ALX.AX  recent 66.7% stake buy in Chicago
Skyway Toll Road will dilute free cash flow per security
    ** ALX would be better off investing in existing and
adjacent roads where it benefits from synergies, less
competition
    ** Brokerage cuts fair value estimate to A$6.0 per share
from A$7.05 after the acquisition
    ** ALX earlier this week announced the stake acquisition for
equity value of $2.01 bln, and announced capital raising of
A$3.10 bln ($2.07 bln) to fund the deal  urn:newsml:reuters.com:*:nL4N30L0CU
 urn:newsml:reuters.com:*:nL4N30J2R2
    ** IFM Investors, which owns nearly 20% in ALX, opposes the
stake buy, saying it would be highly dilutive to ALX
distributions (https://bit.ly/3BDbtyr)
    ** Morningstar recommends shareholders to not participate in
equity raising, sees limited long-term value in participation
    * Assumes a 25% probability of IFM Investors making a
takeover bid, from earlier 50%
    ** All nine analysts rate the stock "hold"; their median PT
is A$7.20 – Refinitiv data
    ** ALX up 12.9% this year, as of last close, vs a 8.1%
decline in the ASX 200 benchmark  .AXJO  


($1 = 1.4948 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))