Sydney Airport says it will recommend its shareholders accept a $23.6 billion takeover offer from a group of superannuation fund suitors unless a better deal lands on its table.
The ASX-listed airport said on Monday that it would open its books to the Sydney Airport Alliance consortium – made up of IFM Investors, AustralianSuper, QSuper and the New York-based Global Infrastructure Partners – after it increased its bid to $8.75 cash per share offer over the weekend. The airport’s shares closed at $8 on Friday.
The sale of Australia’s biggest airport moved closer on Monday as an infrastructure investor group won permission to conduct due diligence on Sydney Airport Holdings Pt Ltd, after sweetening its takeover offer to A$23.6 billion ($17.4 billion).
The move sent the airport’s shares up 5%, with analysts saying a rival bid appeared unlikely given the scale of the funding needed and foreign ownership rules that mean the airport must remain 51% Australian owned.
“We assign a high probability of a deal succeeding given the board’s commitment to unanimously recommend the (consortium’s) offer if there is no alternative higher offer,” Credit Suisse analysts said in a note.
Sydney Airport is Australia’s only listed airport operator and a purchase would be a long-term bet on the travel sector which has been battered by the pandemic. The country plans to gradually open its borders once 80% of adults are fully vaccinated, a milestone expected by the end of the year.
A successful takeover would be among the largest buyouts ever of an Australian firm and underline a year of stellar deal activity, that has already seen a mega $29 billion buyout of Afterpay by Square.
The improved offer of A$8.75 a share – an increase of 3.6% – follows prior proposals from the consortium pitched at A$8.45 and A$8.25, both of which were rejected by the airport operator’s board as inadequate.
