Sydney Airport was the subject of a takeover bid in the hot M&A market that we are in the midst of. On the 5th of July, Sydney Airport announced that they have received an unsolicited, indicative, conditional and non-binding proposal from a consortium of infrastructure investors to acquire, by way of scheme of arrangement and trust scheme, 100% of the stapled securities in Sydney Airport at an indicative price of $8.25 cash per stapled security. The acquisition bid comes from IFM Group, QSuper, and Global Infrastructure Management, LLC.
This announcement sent the laggard SYD share price skyrocketing – taking the gains to 33% as SYD shares posted a 1-year high. The morning, however, the SYD Board concluded that the indicative proposal to acquire Sydney Airport not in the best interests of securityholders at the price of $8.25 a share.
The Sydney Airport’s board is known to have considered a range of scenarios in relation to the post pandemic recovery and various other factors including – The strategic and irreplaceable nature of Sydney Airport which is a world class airport and one of Australia’s most important infrastructure assets. Sydney Airport is Australia’s largest airport and is the gateway to international travel in and out of Australia.
Ultimately, Sydney Airport sees the offer of $8.25 a share to be significantly undervalued. SYD shares has always been a well managed company with monopolistic competitive advantages. The pandemic’s impacts have resulted in SYD shares being unloved and as a result, the share price has not gone back up to the pre-pandemic highs.
The Board concluded by saying – The Boards recognise that the security price is likely to trade below the Consortium proposal’s indicative price in the short term, however Sydney Airport will only progress a change in control transaction on terms that deliver and recognise appropriate long term value for Sydney Airport Securityholders.
SYD shares ended the day at $7.81 a share – slightly below the offer price for the takeover.
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