Why SYDNEY AIRPORT STOCK PRICE is Rising On The ASX Today?
Today, Sydney Airport (ASX: SYD) stock price soars by almost 5% after received another takeover bid. The takeover bid is valued at $23.6 billion.
What is exactly this new offer? If you are familiar with this story, you might remember that about a month ago, IFM investors and QSuper lobbed a revised bid for SYD of $8.45 per share. It is an increase of 20 cents from the initial offer of $8.25. At that time, Sydney Airport rejected the proposal.
Since then, that consortium has come back with another bid of $8.75 for the business. After taking advice and considering all the relevant factors, SYD intends to grant the consortium the opportunity to conduct due diligence to enable it to put in a binding proposal. This due diligence is expected to take approximately four weeks after entering into a non-disclosure agreement.
SYD reveals that it may accept the binding offer at a share price of $8.75 if the agreement is acceptable. However, that is only if there are no better bids. According to experts, the current deal at $8.75 may be in the best interests of Sydney Airport’s investors. Although SYD may recommend proceeding to the takeover, any deal would need to be approved by shareholders. Thus, a lot of things still need to happen before a potential takeover is completed.
Sydney Airport shares are currently trading at $8.37, 4.62% higher than yesterday. It is important to note that, SYD share price is still at a discount of 4% from the offer price of the bid.
In terms of performance, Sydney Airport has been obviously impacted by the pandemic. Hence, in July, there were only sixty-nine thousand domestic passengers. That was 75.1% less than last year. The same applied to international travellers, with only thirty-three thousand, down 20.9% year-on-year. Overall, the total passenger’s volume shrank by 68% to 102 thousand.
In the 2021 year to date, total passengers were down by 37.4% to only 6 million.