A group of infrastructure investors have launched a A$22.3 billion ($16.7 billion) takeover bid for the operator of Sydney Airport, in what could be Australia’s largest acquisition deal this year.
In a stock exchange filing on 5 July, Sydney Airport Holdings says it has received “an unsolicited, indicative, conditional and non-binding proposal” from the consortium to acquire 100% of its shares in cash.
The consortium — comprising IFM Investors, Global Infrastructure Management, as well as QSuper — has offered A$8.25 per Sydney Airport share. While this was higher than what it traded on 5 July, Sydney Airport notes that the indicated price “is below where Sydney Airport’s security price traded before the pandemic”.
To this end, it has appointed Barrenjoey and UBS as its financial advisers and Allens as its legal adviser, as it studies the bid.
Sydney Airport adds that it is “undertaking detailed analysis of, amongst other things, whether the proposal is reflective of the underlying value of the airport given its long-term remaining concession and the expected short-term impact of the pandemic”.
If the takeover bid goes through, it will mean that Sydney Airport — Australia’s only listed airport operator — will have a similar ownership structure as other Australian airports, which are owned different groups of infrastructure investors.
The bid for Australia’s largest airport — which sent its stock prices surging on 5 July morning — comes amid the coronavirus pandemic, which has pummelled most quarters of the country’s aviation industry.
Australia’s international borders still remain shut to keep out the coronavirus, with a careful reopening only likely from the end of the year. And while domestic travel demand has picked up in recent months, sporadic lockdowns — sometimes lasting for weeks — have disrupted recovery momentum.
Sydney Airport’s international traffic in May plunged 93% against the 2019 levels, while domestic traffic fell around 39% over the same period.