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Toll road operator Atlas Arteria (ASX: ALX) has told securityholders to reject an unsolicited off-market takeover bid from its largest shareholder IFM Global Infrastructure Fund, with independent directors unanimously calling the offer "too low, opportunistic and highly conditional".
IFM, which already holds 34.48 per cent of Atlas Arteria, is offering $4.75 cash per stapled security under the bid, with a conditional increase to $5.10 per security if IFM's relevant interest reaches 45 per cent or more before the offer closes.
At the higher price, the bid values Atlas Arteria at $7.4 billion.
The board's rejection, outlined in a detailed response to securityholders issued today, comes less than two weeks after IFM announced the hostile bid.
Atlas Arteria independent chair Debbie Goodin did not mince words in advising securityholders to take no action.
“This hostile, highly conditional takeover offer from IFM is opportunistic and materially undervalues Atlas Arteria," says Goodin.
"The offer is designed to accelerate IFM’s creep to effective control of Atlas Arteria without paying a fair premium to securityholders.
"The independent directors of Atlas Arteria recommend that securityholders reject the offer. The boards and management remain focused on continuing to deliver on the strategy to optimise company value and create value for all securityholders.”
The board laid out several grounds for its rejection.
Atlas Arteria closed at $4.79 on 5 May, already above IFM's base offer of $4.75, while the company's 12-month volume-weighted average price sits at $4.94.
Securities traded as high as $5.54 within the prior 12 months, and the board notes that IFM itself acquired Atlas Arteria securities at $5.10 as recently as November 2025.
Even the conditional $5.10 price merely matches what IFM paid on-market six months ago, the board argues, and is only triggered if IFM secures acceptances it does not yet have.
The offer is also laden with conditions.
Atlas Arteria's response highlights 13 categories of conditions and more than 50 sub-conditions attached to the bid, which the board says gives IFM "maximum flexibility" to walk away.
Among the conditions that have drawn the sharpest criticism is a requirement that Atlas Arteria withdraw a right of first offer (ROFO) notice issued to Ontario Teachers' Pension Plan for the company's interest in the Chicago Skyway toll road.
That ROFO notice was issued on 22 April - five days before IFM announced its bid - as part of what Atlas Arteria describes as a board-initiated strategic review of the Chicago Skyway asset.
IFM, which is managed by IFM Investors, has been publicly critical of Atlas Arteria's stewardship of the Chicago Skyway since the company acquired the concession in September 2022.
In its bidder's statement, IFM describes the acquisition - struck at 43 times 2022 EBITDA - as "shareholder value destruction" and notes Atlas Arteria has not increased distributions in four years.
An independent expert's report has been commissioned and will be included in a formal target's statement to be sent to securityholders in the coming weeks.
The board says it expects the report will conclude the offer is neither fair nor reasonable, though that assessment has not yet been finalised.
IFM Investors manages more than $230 billion in assets on behalf of Australian and international institutional investors, including major superannuation funds.
The infrastructure manager had flagged its interest in full ownership of Atlas Arteria for several months before launching the formal bid.
Atlas Arteria's board urged securityholders to take no action and wait for the target's statement and independent expert's report before making any decision on the offer.
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