Atlas Arteria have announced equity raising and are offering a share price of $6.20 for eligible shareholders.
I’m a young investor. What are your thoughts on Atlas Arteria? Is it worth investing in them for the long term?
A: I am not a huge fan of Atlas Arteria (ALX) mainly because I don’t have a keen interest in exposure to (largely) French toll roads.
The capital raising of $420m at $6.20 per share was used to repay debt, with retail investors being given the opportunity to invest in a $75m Share Purchase Plan. This closes on 25 June.
The application price of $6.20 is approximately a 10% discount to the current market price of $6.80. On this basis, the SPP ,looks ok. On valuation, the brokers have a target price of $6.65 for the stock. All ratings are neutral. On distributions, the FY20 distribution has been cancelled. For FY21, the brokers’ forecast 30.8c per share, giving a forecast yield of 4.5%.