Sydney Airport rejects sweetened offer of US$16.81 billion, but remains ‘open’ to higher bid

Sydney Airport. (PHOTO: Kurt Ams via SITA)

Sydney Airport Holdings on Monday (16 August) announced that it had rejected an improved bid from a group of infrastructure investors worth A$22.80 billion (US$16.81 billion), saying that it undervalued the airport operator, but that it was open to a higher offer. The unanimous board rejection comes a month after the airport operator turned down an initial bid from the Sydney Aviation Alliance (SAA), a consortium of Australian investors IFM Investors and QSuper and US-based Global Infrastructure Partners.

Australia’s largest pension fund, AustralianSuper, has joined the consortium, Sydney Airport said, in a move that could make it tougher for a rival offer to emerge given the requirement for 51 percent Australian control of the airport. UniSuper, Sydney Airport’s biggest shareholder with a 15.3 percent stake, has indicated it is open to rolling that equity into an investment in the privatised company, as required as part of the bid conditions.

Sydney Airport said its board was open to engaging with the Sydney Aviation Alliance if the consortium lifts its indicative price “to appropriately recognise long term value for Sydney Airport security holders”.

“In coming to this conclusion, the current environment does not change the boards’ view of the long-term value,” Sydney Airport said in its statement. “The boards also note the rapid increase and acceleration in Australian vaccination rates in recent weeks and the governments’ plans to progressively ease restrictions as the population reaches vaccination targets which will then see the re-opening of travel. Sydney Airport remains strongly positioned, has strengthened its balance sheet and tightly managed costs to maintain flexibility to respond to a range of recovery scenarios and to pursue sensible growth opportunities as the recovery unfolds.”

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