Atlas Arteria (ASX:ALX) faced the risk of Ontario Teachers' Pension Plan (OTPP) exercising a put option as IFM's unit is expected to increase its stake in the toll road operator to more than 45%, Jefferies said in a note on Monday.
Atlas continued to recommend that shareholders reject the off-market takeover bid by Diamond Infraco 1, an IFM Global Infrastructure Fund subsidiary, for 100% of the fully paid stapled securities that it does not already own in the company, according to a Monday filing with the Australian bourse.
The investment firm said that with IFM continuing to buy shares in the company, the market will have to decide whether Atlas' management can increase the value of the company's assets.
OTPP could potentially sell its 33.33% stake in the Chicago Skyway toll road. Despite the reduction in value, Jefferies does not expect it to lead many shareholders to accept IFM's offer.
Jefferies maintained a buy rating on Atlas Arteria with a price target of AU$5.43.