SYDNEY (CU)_A couple of months ago, the board of Sydney Airport granted due diligence to the Sydney Aviation Alliance, after the syndicate revised its offer, after two of their earlier bids were rebuffed by the airport’s board. Signalling an end to a two-month deadlock with the consortium, which is made up of IFM Investors and Global Infrastructure Partners, the management of Australia’s biggest and busiest airport positively responded to the third offer of about $8.75 a share, suggesting a valuation of more than $32 billion including debt.
Now, the consortium appears to be on track to take the keys to the Sydney Airport, after having four weeks to look at the airport’s books and spending the past few weeks negotiating an agreement and seeking approval from investors. It is believed that the airport’s board has unanimously recommended that shareholders vote in favour of the offer, which could result in the biggest ever cash takeover in Australia’s history.
However, the bid will require regulatory approval.
Describing the finalisation of the deed as a “significant step forward”, a spokesperson for the Sydney Airport Alliance said the syndicate looked forward to the voting by security holders, on the proposed deal, at meetings likely to be held in early-2022. “Our alliance represents many millions of Australians […] we intended to work hard to bring more flights and passengers back to the airport as the aviation industry emerges from COVID-19,” they added.
Since the beginning of the pandemic last, the aviation sector of Australia has been severely affected by the global health crisis, with border closures and the frequent clamp down on domestic travel seeing revenue and earnings tumbling at record levels. Nevertheless, the international border of the state of New South Wales opened last week, and the government has announced plans to reopen all domestic borders, with the exception of Western Australia, before the end of the year.
On Monday (8 November) morning, Sydney Airport Holdings’ share price lifted off following the takeover news, opening up almost 3 per cent on the ASX, at $8.46.
Sharing his news regarding the announcement, the Airport’s chairman David Gonski noted that the decision was made following prolonged discussions and engagements between all the parties involved. “The Sydney Airport Boards believe the outcome reflects appropriate long-term value for the airport, and unanimously recommend the proposal to security holders, subject to customary conditions such as independent expert approval and no superior proposal,” he noted.