Sydney Airport has received a US$16.7 billion buyout bid from a consortium of investors, sending its share price up double digits.
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Sydney Airport, Australia’s largest and only publicly listed airport, received the US$6.17 per share takeover bid from a consortium dubbed ‘Sydney Aviation Alliance’ including IFM Investors and Q Super, reported multiple news outlets.
The takeover news sent the Sydney Airport stock up as much as 38% to US$6.02 in early Monday trade, though it later retreated to around US$5.65, as the deal has not been confirmed. In response to the deal, Sydney Airport said the offer was lower than its pre-pandemic share price, which hit a record US$6.61 in January last year and it would evaluate the offer.
The deal is contingent on granting due diligence and recommending it to shareholders in the absence of a superior offer. It is also contingent on UniSuper, Sydney Airport’s largest shareholder with a 15% stake, agreeing to reinvest its equity interest for an equivalent equity holding in the consortium’s vehicle, said Reuters.
The deal news comes on the back of a two-week lockdown across Australia which has seen domestic travel between New South Wales, Victoria and Queensland stifled, due to restrictions affecting interstate travel.
Restrictions have eased now in Brisbane and are expected to ease on 9th July, in Sydney.
In May, Sydney Airport’s international traffic was down more than 93% versus the same month of 2019, while domestic traffic was down 39.2%.
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While Sydney Airport has been the only major airport hub in the city, Western Sydney Airport is due to open in 2026. IFM currently holds stakes in major airports in Melbourne, Brisbane, Perth and Adelaide, while QSuper owns a stake in Britain’s Heathrow Airport.