© Reuters. FILE PHOTO: A woman wearing a protective mask and gloves walks through the international terminal at Kingsford Smith International Airport the morning after Australia implemented a ban on entry to non-citizens and non-residents intended to curb the spr
By Jamie Freed and Shashwat Awasthi
SYDNEY (Reuters) – Sydney Airport Holdings Pty Ltd on Monday rejected an upgraded bid from a group of infrastructure investors worth A $ 2280 million (US $ 16.81 million) to underestimate the airport operator. but said it was open to a higher bid.
The new offer values Sydney Airport at $ 8.45 per share, 2.4% higher than the previous offer of $ 8.25 per share and a premium of more than 9% at Friday’s closing of the shares.
A successful takeover would be one of the largest purchases by an Australian company and would highlight a year of stellar activity, which has already seen a mega purchase of $ 29 billion from Afterpay by Square.
The unanimous rejection at the meeting comes a month after the airport operator rejected an initial offer from the Sydney Aviation Alliance, a consortium of Australian investors IFM Investors and QSuper and Global Infrastructure Partners based in the United States.
Low interest rates have caused pension funds and their investment managers to pursue higher returns.
Australia’s largest pension fund, AustralianSuper, has joined the consortium, Sydney Airport said, to an extent that could make it more difficult for a rival bid to emerge given the requirement of a 51 % Australian control of the airport.
UniSuper, the largest shareholder in Sydney Airport with a 15.3% stake, has indicated that it is open to converting this equity into an investment in the privatized company, as required as part of the tender conditions.
Sydney Airport said its board was open to partnering with the Sydney Aviation Alliance if the consortium raises its target price “to properly recognize the long-term value of Sydney Airport security holders “.
Sydney Airport is the only listed airport operator in Australia and a purchase would be a long-term bet for the travel industry that has been hit by the pandemic.
Australia’s international border remains closed and Sydney is in the eighth week of blockade following an outbreak of the Delta variant of COVID-19.
However, analysts and investors believe there is room for a higher price, given the good long-term prospects of the airport operator.
Jefferies (NYSE 🙂 analyst Anthony Moulder said on July 15 that a price closer to $ 9 per share would be a more appropriate premium for the airport operator.
Sydney Airport will have to report its first half financial results on Friday. Sydney Aviation Alliance and AustralianSuper did not respond immediately to requests for comment.
(1 $ = 1.3565 Australian dollars)
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