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On October 25, 2017, passengers walk with their luggage towards the departure gates at Sydney International Airport in Australia. FILE PHOTO: REUTERS/Steven Saphore (Reuters) – SYDNEY, July 15 (Reuters) – Sydney Airport Holdings Pty Ltd (SYD.AX) announced on Thursday that it will reject a takeover offer of A$22.26 billion ($16.60 billion) from a group of infrastructure investors, which, if accepted, would have been one of Australia’s largest-ever buyouts. The operator of Australia’s busiest airport said its board of directors unanimously agreed that the plan undervalued the airport and was not in shareholders’ best interests. The Sydney Aviation Alliance, which includes IFM Investors, QSuper, and Global Infrastructure Partners, made an offer of A$8.25 per share last week, a 42 percent premium to the company’s last trading price before the offer. find out more Its stock ended at A$7.80 on Wednesday before the proposal was rejected, amid doubts over whether the board would approve the proposal, which was subject on its approval. On Thursday, the business acknowledged that its stock would likely trade below the consortium’s indicated price in the short term, but said it would only pursue a change of control deal that would “provide and recognize sufficient long-term value.” A request for comment from the Sydney Aviation Alliance was not immediately returned. According to Jefferies analyst Anthony Moulder, the bid was a strong start but did not provide a sufficient takeover premium to the existing fair value. Sydney Airport is Australia’s sole publicly traded airport, and acquiring it would be a long-term investment in the travel industry. After an increase in local COVID-19 cases, the city is currently on lockdown for at least two more weeks. find out more If the purchase goes through, it will be owned by consortia of infrastructure investors, largely pension funds, like the country’s other major airports. Due to historically low interest rates, pension funds and their investment managers have been chasing better dividends. The deal, which has a total worth of A$30 billion including debt, will allow them to profit financially if borders are reopened and travel demand picks up. If completed, the deal would be one of the country’s largest by enterprise value in US dollars, on par with Unibail-$22 Rodamco’s billion purchase of mall operator Westfield Group in 2017, according to Refinitiv data. Bloomberg News reported last week, citing unnamed sources, that a consortium led by Macquarie Group (MQG.AX) was considering a competing offer. According to the sources, talks are still in the early stages, and Macquarie may explore joining the Sydney Aviation Alliance. find out more (1 Australian dollar = 1.3407 dollars) Jamie Freed contributed to this report.
Chris Reese and Karishma Singh edited the piece.
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