Atlas Arteria is undertaking a capital raising via a $420m institutional placement and share purchase plan of up to $75m. Proceeds are to be used to repay the debt related to the APRR investment.
Morgans recommends clients take up the offer as the price represents at least a 12% potential return compared with the target, which is reduced to $6.98 from $7.21.
Given the recent strength of the share price and reduction in the target, the potential return at current prices has compressed to 5%. Hence, Morgans downgrades to Hold from Add.
Target price is $6.98.Current Price is $6.77. Difference: $0.21 – (brackets indicate current price is over target). If ALX meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).