Australia's Atlas Arteria rejects IFM's $5 billion offer as 'opportunistic' (updated)

Atlas Arteria

06/05/2026 24:12

Atlas says IFM buyout proposal "materially undervalues" co

Says offer price fails to adequately reflect value of toll road portfolio

Possible revised proposal to come in soon - analyst

Adds analyst comments in paragraphs 5-6, shares in paragraph 7

By Shivangi  Lahiri and Roshan Thomas

May 6 (Reuters) - Australia's Atlas Arteria ALX.AX on Wednesday rejected a proposal from IFM Global Infrastructure Fund to buy the toll road operator at a valuation of A$6.89 billion ($4.95 billion), saying the "highly conditional" offer materially undervalued it.

The rejection comes a week after IFM via its investment unit Diamond Infraco 1 offered to buy all the shares it does not already own in Atlas for A$4.75 per stapled security in cash.

"This hostile, highly conditional takeover offer from IFM is opportunistic and materially undervalues Atlas Arteria," Chair Debbie Goodin said in a statement.

The price is materially below an assessment of the company's fundamental value by independent directors and fails to adequately reflect the value of its global toll road portfolio and the embedded growth opportunities, Goodin said.

"This looks like the classic opening move in a potential takeover battle, said Tim Waterer, chief market analyst at KCM Trade.

"We could see a revised proposal in the coming weeks, but the outcome will ultimately depend on whether IFM is willing to pay a premium that properly reflects the quality and cash flow certainty of these infrastructure assets," Waterer added.

Shares of Atlas were up 0.8% at A$4.83, hitting their highest level since April 30, while the broader benchmark index .AXJO was up 1.1%.

Atlas, which owns a portfolio of five assets spanning France, Germany and the United States, said the offer was subject to conditions that "may never be satisfied or waived", while some were "already incapable of being satisfied".

One of the conditions is for Canada's Ontario Teachers' Pension Plan (OTPP) to waive its right to sell its stake to Atlas at a premium in the event of a change of control.

The toll road operator said it was "unreasonable" to expect the OTPP would grant such a waiver for no consideration.

Late last month, Diamond Infraco had also dangled a potential sweetener in its offer for Atlas shareholders, saying the offer price would rise to a maximum A$5.10 per share if it secured a 45% or higher stake before the offer closes.

Diamond Infraco 1 currently owns a 34.48% stake in Atlas, making it the largest shareholder, according to LSEG data.

The Melbourne-based asset manager did not immediately respond to a Reuters request for comment.

($1 = 1.3924 Australian dollars)

 (Reporting by Shivangi Lahiri in Bengaluru; Additional reporting by Roshan Thomas; Editing by Sahal Muhammed, Subhranshu Sahu and Christopher Cushing)

 ((Shivangi.Lahiri@thomsonreuters.com;))