Canada Pension, OMERS Sell Chicago Skyway Stake Despite Legal Threats From Buyer’s Top Shareholder

Canada Pension Plan Investment Board (CPP Investments) and OMERS Infrastructure announced on Monday that they have agreed to sell their respective 33.3% stakes in Skyway Concession Company (SCC), the firm that manages the Chicago Skyway toll road. The transaction combined is reportedly for a total consideration of US$2.013 billion.

Each of the Canadian firms holds a third of the Chicago-based operator, which they acquired in 2016 as a consortium with Ontario Teachers’ Pension Plan (OTPP) for US$2.8 billion, with each of the tripartite gaining 33.3% stake in SCC. OTPP is reportedly keeping its stake.

The buyer–Australian-based toll operator Atlas Arteria–is purchasing both stakes, roping in 66.67% ownership in SCC at the transaction’s close.

Atlas Arteria seems to be pushing through with the purchase despite its top shareholder IFM Investors urging the firm to drop its bid for SCC.

“We are disappointed with the decision by Atlas Arteria to proceed with the acquisition of Chicago Skyway, and as a major shareholder we are considering our options,” IFM Investors said in a statement.

IFM Investors, who owns 19% of Atlas Arteria, threatened legal actions back when the Australian firm was first rumored to be floating a bid for SCC. Among its concerns for protesting the acquisition is its potential to be “significantly value destructive” for Atlas Arteria and dilute the dividends paid to shareholders.

“We reserve all rights against directors for any diminution of value to IFM GIF’s holdings, and the holdings of other shareholders, as a result of any acquisition and concurrent capital raising,” the investment firm added.

Should the sale push through, it’s a comeback for Atlas Arteria who once owned SCC in part back when the Australian firm was known as Macquarie Atlas. The latter was part of the former owners who sold their stake to the Canadian consortium in 2016.

The transaction is subject to customary conditions and regulatory approvals, including the nod of the city of Chicago, and is expected to complete in Q4 2022.

Information for this briefing was found via Bloomberg, Reuters, IPE Real Assets, Financial Review, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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