Lazard back for the ride with Atlas Arteria

Motorists travelling from Chicago, Illinois on the Chicago Skyway. Picture: Bloomberg News

The minds of IFM executives were probably in overdrive on Thursday trying to work out what to make of a move by investor Lazard to lifts its stake in Atlas Arteria after earlier reducing its holding.

A substantial shareholder notice revealed that Lazard now holds 9.83 per cent in the $8.5bn toll road operator, up from 8.76 per cent.

This is only after reducing its position in late September by selling shares for about $8 each.

IFM controls about 19 per cent of Atlas after buying shares at $8.10 and will need Lazard, the second largest investor, on side for any future buyout proposal.

Lazard’s latest acquisition is understood to be at about $6.30 per share.

Its earlier $8 per share sale suggests this would be the minimum price Lazard would accept in a bid from IFM.

IFM has made no secret of its desire to buy Atlas.

Many viewed Atlas Arteria’s acquisition last month of the 66.67 per cent stake in the Chicago Skyway Toll Bridge for $US2bn as an expensive defensive play.

It came with a $3bn entitlement offer, where shares were sold at $6.30 each, a 17 per cent discount to the last closing price.

But other shareholders in Atlas support the price, particularly due to their bet that inflation will remains stubbornly high for a considerable period and will flow through to the asset’s earnings.

IFM was fuming about the acquisition, as it diluted its stake in the business and forced it to participate in the raise if it wanted to maintain the same interest.

IFM could be planning to amass more shares and launch another bid if the retail shareholder take up in the equity raising is weak.

Retail holders have about 500m of the 1.36bn Atlas shares on issue.

But any proposal priced less than $8 per share, or $11bn for the group, is unlikely to succeed.