IFM Investors closes in on seat in Atlas Arteria boardroom

Fund manager IFM is closing in on a seat in the boardroom of toll roads group Atlas Arteria following a controversial US acquisition.

The Chicago Skyway crossing the Calumet River in Chicago.

IFM Investors is closing in on a seat in the boardroom of toll roads group Atlas Arteria as part of a shake up of the company’s board.

IFM is the largest shareholder in Atlas Arteria with a 19 per cent stake, and has been pushing for a nominated director to be appointed since a controversial $2.9bn acquisition of the Chicago Skyway toll bridge in the US.

On Tuesday, Atlas Arteria announced former Transurban executive Ken Daley would be nominated as a director following an agreement with IFM on managing potential conflicts of interest.

Mr Daley is currently a special adviser to IFM, and a director of several companies in which it invests, including Indiana Toll Road, M6 Toll in the UK and Spanish transport infrastructure group Aleatica, which he chairs.

IFM and Mr Daley have agreed that once appointed as a director, he will not discuss any toll road M&A opportunities with IFM or the companies it invests in without first getting clearance from Atlas Arteria chair Debbie Goodin.

In a statement, Atlas Arteria said the measure would protect the company from potential conflicts of interest, and would supplement its existing conflict of interest policy.

“This is not intended to limit Mr Daley’s ability to perform his role as a director of IFM investee companies, however such roles may give rise to circumstances which require disclosure (and possibly other action) under the conflict of interest policy for directors,” it said.

Atlas Arteria’s Australian and Bermudan boards each currently have five directors.

It is intended that Mr Daley will first join the Australian board as an “observer” from January 2023, before the company’s AGM in May, where shareholders will be asked to increase the cap on director numbers to six.

In a statement on Tuesday, IFM said it welcomed Mr Daley’s proposed appointment, which would “protect and enhance” its investment.

“Mr Daley is a globally recognised infrastructure leader with decades of senior executive, board-level and operational toll road experience, with expertise across Europe, the United States, Australia, Latin America and Asia,” the company said.

“IFM GIF (Global Infrastructure Fund) is pleased to have reached this resolution with the Atlas Arteria board and looks forward to engaging collaboratively with the company.”

IFM has been highly critical of the Chicago Skyway deal, which has been described by ­brokers as everything from “expensive” to “skyway robbery”.

Mr Daley’s appointment will ease previous threats by the fund manager to spill the Atlas Arteria board following the acquisition and subsequent equity raising, which it has previously said would be “highly dilutive to distributions”.

Mr Daley previously headed up Aleatica and Indiana Toll Road as chief executive, and before that was president of international development at Transurban during a stint that lasted from 2005 to 2012.

His appointment will require the approval of Atlas Arteria shareholders at the company’s AGM.

Other board changes are also planned, with independent director Ariane Barker retiring at the end of the year, to be replaced by former KPMG partner John Wigglesworth.

Meanwhile, the company is also making changes to the board of its Bermudan entity Atlas Arteria International.

Jeffrey Conyers will retire as chair and director in March, and will be replaced by existing director Fiona Beck. The number of directors will reduce from five to four.

Atlas Arteria’s shares were trading flat at $6.86 on Tuesday afternoon.

Originally published as IFM Investors closes in on seat in Atlas Arteria boardroom