The board of Sydney Airport announced on Thursday (15 July) that it was turning down a US$17 billion takeover bid, calling it “not in the best interests” of shareholders. The airport originally announced on 5 July that it has received a A$22.3 billion (US$17 billion) takeover offer from a group including IFM Investors acting as trustee for IFM Australian Infrastructure Fund, Conyers Trust Company (Cayman) Limited as trustee for IFM Global Infrastructure Fund, QSuper Board (formerly the Board of Trustees of the State Public Sector Superannuation Scheme) as trustee for QSuper (formerly the State Public Sector Superannuation Scheme) and Global Infrastructure Management, LLC (on behalf of its managed and advised clients and funds).
The airport’s board said Thursday that it has “carefully considered the indicative proposal” and concluded the deal “undervalues Sydney Airport”. The leadership said the airport is “strategic and irreplaceable” and is “one of Australia’s most important infrastructure assets”. They also called the proposal “opportunistic” and that the funds making the offer were using the COVID-19 pandemic to try to buy the airport on the cheap.
“Sydney Airport is strongly positioned to deliver growth as vaccination rates increase and we move into the post-pandemic recovery period,” the board said. “It has rapidly adapted to the COVID environment, strengthening its balance sheet, and tightly managing costs to maintain flexibility to respond to a range of recovery scenarios and pursue sensible growth opportunities as the recovery unfolds.”
The airport said on Thursday it recognised its share price was likely to trade below the consortium’s indicative price in the short-term but said it would only progress a change in control transaction that would “deliver and recognise appropriate long-term value”.
The Australian government has a 49 percent cap on foreign ownership of airport operators. IFM, QSuper and UniSuper are Australian investors, while Global Infrastructure Partners is from the United States.
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