Securities in global toll roads group Atlas Arteria jumped more than 16% on Wednesday after infrastructure giant IFM emerged with a 15% stake and an intention to look at making a bid.
IFM’s stake includes shares and derivatives, including securities picked up after the market closed on Tuesday at $8.10 each.
That move was well leaked to the business media on Tuesday night for the Wednesday morning print editions with updates on the various websites.
Naturally that gave punters a guide to aim at when trading on the ASX started on Wednesday and they bid the shares past the $8.10 level to $8.35, up more than 18%. They later settled back at $8.25, up 16.2% with the market waiting to see if any rivals emerge.
The shares traded around $8.25 for much of the session and it is clear investors see that price as where a bid might land, if it happens.
At around $8.10 per security, Atlas is valued at $7.8 billion, compared to $6.8 billion at Tuesday’s close of $7.11.
IFM is the global investment arm of a group of mostly industry super funds. It now wants limited access to Atlas’ books to see if the information in them would support a non-bonding offer for Atlas.
In its statement to the ASX before trading started on Wednesday, Atlas Arteria said it had been “advised by the IFM Global Infrastructure Fund that it has obtained a combined relevant and economic interest in approximately 15% of the issued securities of Atlas Arteria. That holding includes securities acquired by IFM after market-close yesterday at a price of $8.10 per security.”
“IFM has indicated that it intends to request from Atlas Arteria access to certain limited company information to assess whether it can submit a non-binding indicative proposal to Atlas Arteria to acquire all of the Atlas Arteria securities it does not already own.
“IFM has also indicated that any proposal which is submitted would be subject to, amongst other things, satisfactory completion of due diligence by IFM.”
“Atlas Arteria has not yet received any such request for information nor any proposal from IFM to acquire additional securities in Atlas Arteria. There is no certainty that any such acquisition proposal will be made by IFM.”
Atlas said its securityholders do not need to take any action in relation to this announcement at the moment and it has appointed UBS as financial adviser and Gilbert + Tobin as legal adviser in relation to this matter.
But the highly conditional nature of the IFM approach, a raid and then demands for limited information, but before a bid can be made, due diligence will have to be conducted, is not fair at all to existing Atlas security holders. They (and the company) will be left hanging while IFM makes up its mind.
This has all the hallmarks of a variation of a ‘dawn raid’ – a hostile takeover tactic from decades ago.
This one the deal was done after the market closed, and perhaps by the time the ASX had stopped taking filings on Tuesday night. Atlas knew about it and had to lodge its statement first thing Wednesday morning, making it a form of ‘dawn raid’.
