AUSTRALIA. A group of investors has increased its offer to purchase Sydney Airport at a renewed valuation of around A$23.6 billion (US$17.35 billion). The airport board has said it would recommend a sale unless there was a compelling alternative offer.
The Sydney Aviation Alliance issued a revised indicative proposal for A$8.75 cash per stapled security, compared to an initial A$8.25 on 5 July, later raised to A$8.45 on 16 August. The alliance includes IFM Investors, pension fund QSuper and Global Infrastructure Management.
In response, the board of Sydney Airport Holdings Pty Ltd said today: “Sydney Airport intends to grant the consortium the opportunity to conduct due diligence on a non-exclusive basis to enable it to put forward a binding proposal, subject to entry into a non-disclosure agreement on acceptable terms.”
That due diligence is expected to take around four weeks. Should the consortium then make a binding offer at the A$8.75 price noted above, the board said its intention “is to unanimously recommend that security holders vote in favour in the absence of a superior proposal”.
Analysts commented today that a rival bid was unlikely to succeed given the scale of funding required along with foreign ownership rules that mean Sydney Airport must remain 51% Australian-held.
The Sydney Airport Holdings share price rose +4.6% today to A$8.37. Just before the initial approach by the consortium in July, shares were trading at A$5.81.
