Wed. Jul 6th, 2022

Motorways are the safest way to travel by car. They are also good parking places for investors during turbulent economic times. That explains why two of the world’s largest alternative asset managers are duking it out for control of Atlantia, the Italian infrastructure group weakened by the deadly Genoa bridge collapse almost four years ago.

News that Blackstone might enter the bidding war followed confirmation that infrastructure investors Brookfield Asset Management and Global Infrastructure Partners are joining Florentino Pérez, chair of engineering company Grupo ACS and president of football club Real Madrid, in a takeover offer. The shares rose 7 per cent on Thursday, increasing Atlantia’s enterprise value to € 55bn.

The appeal of Atlantia’s assets, which include airports such as Rome and Venice, is clear. The index-linked revenues from infrastructure assets offer a hedge against spiraling inflation. ACS has its eye on an additional prize: Atlantia’s half of the pair’s Abertis motorway joint venture.

The biggest obstacle to any bidder is the Benetton family, which has a one-third holding in Atlantia. On Thursday it told GIP and Brookfield it was not interested in their approach.

This is not the first time Pérez and ACS have kicked the tires at Atlantia. A year ago the group put in a rejected € 10bn offer for Autostrade per l’Italia, the unit responsible for the Genoa disaster. Atlantia eventually struck a deal for Autostrade with a consortium led by state investor Cassa Depositi e Prestiti, which included Blackstone.

Atlantia valuations against market value, road traffic at Abertis and European infrastructure between Ferrovial, Vinci and Atlantia

Atlantia is already trading at 11 percent premium to its estimated net asset value, thinks Bosco Ojeda at UBS. That reflects bid speculation, though any discount would have been limited by half of Atlantia’s NAV being represented by cash. Peers such as Ferrovial and Vinci are trading at 10 per cent discounts to estimated NAVs.

Further upside is limited. Rising fuel costs and the growing likelihood of an economic slowdown cast a shadow over toll revenues despite index-linkage. The flip side is that buyout groups flush with cash are willing to put the rubber to the road to get hold of prized national assets.

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