Atlas Arteria Takeover Offer Fixed at A$5.10 as IFM Increases Holding Above 40%

IFM Increases Holding Above 40% with Final Offer

IFM Global Infrastructure Fund's subsidiary Diamond Infraco 1 Pty Ltd has boosted its stake in toll road operator Atlas Arteria (ASX:ALX) to over 40%, reiterating its cash takeover offer at A$5.10 per security as best and final. The offer, representing a 17.78% premium over the pre-offer price of A$4.33, will close on 25 June 2026 with no planned extension unless IFM surpasses 50% ownership, triggering an automatic 14-day extension under the Corporations Act.

Securityholders are urged to accept the unconditional offer or sell on-market if able to secure the A$5.10 price, as IFM cautions that liquidity may dry up and the share price could fall materially after the offer closes. The bidder also warns that on-market purchases at the offer price may not continue through the closing period, exposing sellers to settlement risks.

Atlas Arteria Board Stands Firm Against Offer, Targets Higher Distributions

Atlas Arteria's independent directors remain unanimous in their recommendation to reject IFM's bid, describing the offer as opportunistic and undervaluing the company by approximately 12% against the independent expert’s midpoint valuation of A$5.79 per security. The board plans to target distributions of at least 60 cents per security over the next 12 months, up from the prior guidance of 40 cents, funded by portfolio cash flows, potential asset sales, and, if needed, corporate borrowings.

This increased distribution target includes ordinary payments of 40 cents and special distributions of at least 20 cents per security. However, if IFM crosses the 50% ownership threshold and exercises the Ontario Teachers’ Pension Plan (OTPP) put option, proceeds from asset sales will first repay a US$1.2 billion bridge facility before any special distributions can be made.

Exclusive Negotiations for Warnow Tunnel Sale

In a strategic move to unlock shareholder value, Atlas Arteria has entered exclusive discussions with French concession giant Eiffage S.A. regarding the potential sale of its 100% stake in the Warnow Tunnel in Germany. The exclusivity agreement grants Eiffage four weeks to conduct due diligence and negotiate terms, with a targeted transaction completion in the second half of 2026, subject to regulatory approvals.

The Warnow Tunnel, the smallest asset in Atlas Arteria’s portfolio, is expected to fetch between €100 million and €115 million, translating to net proceeds of approximately 11 to 13.5 cents per security. These proceeds would form part of the company’s increased distribution plans. Atlas Arteria is also progressing potential divestments of the Chicago Skyway, reflecting a broader value realisation strategy.

Risks for Securityholders Holding Post-Offer

IFM’s bidder statement highlights several risks for securityholders who choose not to accept the offer, including reduced trading liquidity, increased foreign tax liabilities, and contingent liabilities if IFM’s ownership exceeds 50%. The proposed US$1.2 billion bridge facility to fund the OTPP put option would elevate financial risk through higher interest expenses, potentially pressuring future distributions.

Additional concerns include operational underperformance, the limited remaining concession life of APRR (which accounts for most earnings), regulatory and tax risks in France, and uncertainty around future toll increases on the Dulles Greenway. The bidder also flags the possibility of speculative asset sales and value-destructive mergers and acquisitions, which could negatively impact securityholder returns.