Sydney Airport agrees to $17.5bn takeover bid from infrastructure investor group

Industry

Sydney Airport Holdings said it has agreed to accept a A$23.6 billion ($17.5 billion) takeover bid from an infrastructure investor group in one of Australia’s biggest buyouts.

The company said in a statement it unanimously recommended the buyout offer from Sydney Aviation Alliance (SAA), comprised of Australian investors IFM Investors, QSuper, AustralianSuper and US-based Global Infrastructure Partners.

The deal to buy Australia’s largest and only listed airport operator comes as the country this month eased its international border restrictions for the first since the beginning of the coronavirus pandemic.

A scheme implementation deed had been made and a scheme meeting would take place in January, the company said.

It follows a sweetened offer by SAA of A$8.75 a share in September – 6 per cent higher than its first approach at A$8.25 – which convinced the company’s board to give the consortium access to due diligence.

“The Sydney Airport Boards believe the outcome reflects appropriate long-term value for the airport and unanimously recommend the proposal,” Chairman David Gonski said.

Conditional

The deal is conditional on an independent expert’s report, approval from 75 per cent of the airport operator’s shareholders and a green light from competition regulators and the Foreign Investment Review Board, a process that could take months.

“We look forward to security holders voting on the proposed deal,” IFM Investors Chief Executive David Neal said in a statement on behalf of the consortium.

“Our alliance represents many millions of Australians and we intend to work hard to bring more flights and passengers back to the airport as the aviation industry emerges from Covid-19.”

The Australian Competition and Consumer Commission is investigating the transaction’s impact on competition, including the impact of the consortium’s ownership of multiple airports in the country. It is due to release its findings on 16 December.

IFM Investors owns large stakes in airports in other Australian state capitals, including Brisbane and Melbourne.

RBC Capital analysts said the “unanimous” recommendation of the board had “capped” the potential share price appreciation, which was 2.67 per cent higher at $8.45.

 

Source: Civil Aviation Authority – Qatar