Atlas Arteria slams IFM Investors’ proposal for Chicago Skyway
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The news: The board of Atlas Arteria has once again urged shareholders to reject a takeover offer by IFM Investors, taking aim at the suitor’s plans for its 67%-owned Chicago Skyway.
The context: IFM, which recently took its stake in Atlas to more than 50%, has suggested the company renegotiate with Chicago Skyway’s 33% owner Ontario Teachers’ Pension Plan (OTPP) over a put option on the asset.
Under IFM’s proposal, Atlas would replace the put option with a call option allowing it to acquire OTPP’s stake for USD1.02 billion ($1.48 billion), including a previously agreed USD100 million settlement payment.
The acquisition would then be funded through a discounted, non-renounceable rights issue, a structure Atlas argues would dilute shareholders who do not participate.
The board says it considered the proposal but concluded extinguishing the put option for USD100 million represented the lowest-cost outcome and avoided the costs and shareholder dilution associated with a large equity raising.
IFM increased its takeover offer for Atlas Arteria to $5.10 per share last month, up from an initial offer price of $4.75.
The source: ASX
