Atlas Arteria Values Offer 12% Below Expert Range

Atlas Arteria Rejects IFM’s $5.10 Offer as Undervalued

Atlas Arteria (ASX:ALX) has doubled down on its rejection of the unsolicited takeover bid from IFM Global Infrastructure Fund’s subsidiary, Diamond Infraco 1 Pty Ltd, maintaining that the current offer price of A$5.10 per security materially undervalues the company. In its fourth supplementary target’s statement lodged on 18 June 2026, the Independent Directors unanimously urged securityholders to reject the bid, which stands approximately 12% below the midpoint of the Independent Expert’s valuation range of $5.39 to $6.20.

The directors labelled the offer as opportunistic and insufficient, reinforcing their view that it fails to provide an appropriate control premium to shareholders. They also confirmed their intention to reject the offer in respect of their own holdings.

IFM’s Offer Price Caps at $5.10 but Could Pay More

While IFM has signalled it will not pay more than $5.10 per security for at least 12 months after the offer closes unless a competing proposal emerges, Atlas Arteria highlighted that this cap does not prevent IFM from supporting transactions that could deliver shareholders more than $5.10. For example, buybacks or capital reductions not involving IFM participation could boost returns beyond the current offer price.

This nuance suggests the bidder’s stated price ceiling may not fully reflect the maximum value shareholders could realise under IFM’s ownership.

Asset Sales Could Unlock Greater Value

The company also flagged ongoing interest in its portfolio, including toll road assets in France, Germany, and the United States, and confirmed it is actively exploring potential divestments. Net proceeds from any asset sales would be available for distribution to shareholders, providing an alternative route to value creation beyond the takeover bid.

Atlas Arteria reaffirmed its guidance for ordinary distributions of 40.0 cents per security in 2026 and maintained its target of at least that level, signalling confidence in its cash flow generation despite takeover uncertainties.

IFM’s Past Dealings Suggest Possible Price Increases

Atlas Arteria pointed to IFM’s track record of raising offer prices in previous acquisitions, citing examples such as Aleatica (formerly OHL México), Flughafen Wien AG (Vienna Airport), and Sydney Airport. In these cases, IFM increased its initial bids by an average of around 38%, sometimes years after initial offers were made. This historical pattern underpins the directors’ argument that shareholders might benefit from holding on rather than accepting the current bid.

Market Dynamics and Governance Safeguards

The statement also addressed market mechanics, warning that the bidder’s ability to purchase shares on-market could encourage stock borrowing and short selling, potentially influencing voting power. Institutional shareholders who wish to resist the takeover are advised to consider restricting stock lending.

Additionally, Atlas Arteria reiterated the binding nature of a Director Representation Agreement with IFM, which commits the bidder to uphold key corporate governance principles, including maintaining independent board chairs and a majority of independent directors, regardless of IFM’s shareholding level.