In today’s briefing:
- Atlas Arteria Placement – How to Lose Friends and Alienate Your Largest Shareholder
- Atlas Arteria (ALX AU): Acquisition, ANREO & ASX50 Inclusion
- Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit
Atlas Arteria Placement – How to Lose Friends and Alienate Your Largest Shareholder
- Atlas Arteria (ALX) aims to raise around US$2bn (A$3bn) via a non-renounceable entitlement offer to fund the purchase of its majority interest in Chicago Skyway.
- Over the past few months, ALX has garnered interest from IFM which has increased its stake to 19.99%. IFM had publicly opposed this acquisition.
- In this note, we will talk about the deal dynamic and run the deal through our ECM framework.
Atlas Arteria (ALX AU): Acquisition, ANREO & ASX50 Inclusion
- Atlas Arteria (ALX AU) is acquiring 66.67% in Skyway Concession Company LLC, the concessionaire of the Chicago Skyway for an equity value of US$2.013bn (A$3.098bn).
- The acquisition will be funded by a fully underwritten 1:1.95 ANREO to raise A$3.098bn. The offer price of A$6.3/share is a 13.7% discount to TERP and 19.3% discount to last.
- The increase in market cap could result in Atlas Arteria (ALX AU) being added to the S&P/ASX 50 Index at the December rebalance.
Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit
- KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.
- The transaction is stuck in an impasse as Ramsay Health Care (RHC AU) will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.
- The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.
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