Sydney Airport accepts $ 17.5 billion buyout as Australia begins to reopen

International travelers arrive at Sydney Airport following the easing of coronavirus disease (COVID-19) border restrictions, with fully vaccinated Australians allowed to enter Sydney from overseas without quarantine for the first time since March 2020, in Sydney, Australia, November 1, 2021 REUTERS / Jaimi Joy

  • Board of Directors Unanimously Recommends A $ 8.75 Offer for an Equity Consortium
  • Agreement conditional on approval by competition regulators
  • Unanimous recommendation caps share price up – RBC

SYDNEY, Nov. 8 (Reuters) – Sydney Airport Holdings (SYD.AX) on Monday announced that it had accepted an Australian $ 23.6 billion ($ 17.5 billion) takeover bid from a group of investors in infrastructure as part of one of Australia’s biggest buyouts.

The company said in a report it unanimously recommended the takeover bid from Sydney Aviation Alliance (SAA), made up of Australian investors IFM Investors, QSuper, AustralianSuper and Global Infrastructure Partners, based in the United States.

The deal to buy Australia’s largest and only airport operator comes as the country this month eased international border restrictions for the first time since the start of the coronavirus pandemic. Read more

An act of implementation of the program had been drawn up on Monday and a meeting of the program would be held in January, the company said.

It follows a softened SAA offer of A $ 8.75 per share in September – 6% more than its first approach at A $ 8.25 – which convinced the company’s board to give the consortium access to due diligence. Read more

“The Sydney Airport Boards believe the result reflects appropriate long-term value for the airport and unanimously recommend the proposal,” said Chairman David Gonski.

The agreement is conditional on the report of an independent expert, the approval of 75% of the shareholders of the airport operator and the green light of competition regulators and the Foreign Investment Review Board, a process that could take months.

“We look forward to securityholders voting on the proposed deal,” IFM Investors Managing Director David Neal said in a statement on behalf of the consortium.

“Our alliance represents several million Australians… and we intend to work hard to bring more flights and passengers to the airport as the aviation industry emerges from COVID-19.”

The Australian Competition and Consumer Commission is studying the impact of the transaction on competition, including the impact of the consortium’s ownership of several airports in the country. He is due to publish his findings on December 16.

IFM Investors has significant stakes in airports in other Australian state capitals, including Brisbane and Melbourne.

RBC Capital analysts said the board’s “unanimous” recommendation had “capped” the potential appreciation in the stock price, which was 2.79% higher as of Monday at $ 8.46.

“I think this is a good deal for investors,” said Jamie Hanna, deputy director of investments at VanEck, an investor in the airport.

“He thinks shareholders will likely vote to accept it next year.”

The deal places “no store, no talk” obligations on Sydney Airport and gives SAA the ability to match any potential top proposition, the company said. It includes a severance indemnity of A $ 150 million payable if the agreement is terminated by either party.

($ 1 = AU $ 1.3517)

Reporting by Paulina Duran in Sydney and Sameer Manekar in Bengaluru; Editing by Stephen Coates

Our standards: Thomson Reuters Trust Principles.

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