Atlas Arteria rules out equity raisings for mergers and acquisitions as it targets partnerships

Chicago Skyway Toll Bridge, crossing the Calumet River, owned by Atlas Arteria. Picture: iStock

Almost three years after Atlas Arteria had to fend off advances from investor IFM trying to buy the business on the cheap, the Australian listed global toll road operator is understood to be playing nice with the superannuation fund investor.

IFM owns 27 per cent of Atlas, and it now has two directors on the board.

While it may acquire the business in full at some point, a deal is not currently on the table.

The relationship of Australian infrastructure group IFM with the previous management team at Atlas was believed to be frosty, but is now understood to be working cooperatively with the company’s current executive team, led by ex-Transurban operative Hugh Wehby, and they may even co-invest in global toll road opportunities.

Mr Wehby presented at the Macquarie Australia Conference in Sydney on Thursday and ruled out raising equity for acquisitions.

“We don’t have the right to do anything that requires equity,” he said, adding the group’s focus was more on partnerships with exiting co-investors on its toll roads and others like CPP and Plenary.

Before Mr Wehby began as the company chief in November, Atlas Arteria in 2022 raised $3bn of equity at $6.30 per share, a 17 per cent discount to the last traded share price.

This was to buy a 66.67 per cent interest in Chicago Skyway Toll Bridge for $US2bn.

This infuriated shareholder IFM, which was keen to buy the business at the time, and it meant it had to tip in additional equity to retain the size of its holding.

IFM first raided the register of Atlas Arteria in the middle of 2022, buying shares at $8.10 to secure an 8 per cent stake.

Shares on Thursday closed at $5.22 up 1.75 per cent.

Atlas Arteria owns toll road interests in the United States and Europe, including ADELAC, APRR, Chicago Skyway, Dulles Greenway and Warnow Tunnel.

Mr Wehby said the group was focused on resolving two legal battles playing out in the United States surrounding the level of income it could collect for toll roads.

The battles were with the Virginia State Corporation Commission to increase tolls on the Dulles Freeway, and also included a federal claim on grounds it had breached the constitution in that it did not receive fair compensation for its private assets being used for public use.

Mr Wehby at the conference said Atlas Arteria’s hope was the matter would settle out of court.