Sydney Airport is prepared to recommend that shareholders back the latest takeover offer — valued at A$23.6 billion ($17.4 billion) — from a group of infrastructure investors.
The operator of Australia’s largest airport says it will open its books to the consortium — comprising IFM Investors, Global Infrastructure Management, QSuper, as well as AustralianSuper — to “conduct due diligence on a non-exclusive basis.” The decision followed the consortium’s boosting its bid to A$8.75 in cash per share.
The non-exclusive basis of the due diligence means Sydney Airport may also consider other takeover bids if they arise.
The consortium, known as the Sydney Airport Alliance, had previously offered A$8.25 per share in July and A$8.45 in August. Sydney Airport rejected both attempts, stating that the offers undervalued the airport, and were not in the best interest of its shareholders.
Sydney Airport expects due diligence to be completed in about four weeks.
If the consortium maintains its offer at A$8.75 per share, the operator intends to “unanimously recommend” to its shareholders to support the proposal, “in the absence of a superior proposal and subject to an independent expert concluding that the proposed transaction is in the best interests of Sydney Airport securityholders”.
If it proceeds, the deal will be one of Australia’s largest infrastructure acquisition deals this year.
Sydney Airport has been punished by a collapse in travel demand amid the coronavirus pandemic. In July, it disclosed that traffic was just 2.5% pre-pandemic levels.