© Reuters. FILE PHOTO: A woman wearing a protective face mask and gloves walks through the international terminal at Kingsford Smith International Airport the morning after Australia banned non-citizens and non-residents from entering the country to contain the Sprint
By Jamie Freed and Shashwat Awasthi
SYDNEY (Reuters) – Sydney Airport Holdings Pty Ltd announced on Monday an upgraded offering to a group of infrastructure investors worth $ 22.80 billion.
The new offering values Sydney Airport at A $ 8.45 per share, 2.4% higher than the previous A $ 8.25 per share offer and a premium of more than 9% from Friday's close.
A successful acquisition would be one of the largest buyouts of all time by an Australian company and underscore a year of outstanding deal activity that has already seen a mega-buyout of $ 29 billion from Afterpay by Square.
The unanimous rejection by the Management Board comes one month after the airport operator has rejected an initial offer from the Sydney Aviation Alliance, a consortium of Australian investors IFM Investors and QSuper and the US Global Infrastructure Partners.
Record-low interest rates have caused pension funds and their investment managers to hunt for higher returns.
Australia's largest pension fund, AustralianSuper, has joined the consortium, said Sydney Airport, to make a competing bid more difficult as it requires 51% of Australia's control of the airport.
UniSuper, the largest shareholder in Sydney Airport with a stake of 15.3%, has agreed to contribute this equity to an investment in the privatized company in accordance with the terms of the offer.
Sydney Airport said its board of directors is open to working with the Sydney Aviation Alliance if the consortium increases its indicative price "to adequately recognize the long-term value for the security holders of Sydney Airport".
Sydney Airport is Australia's only publicly traded airport operator and a buy would be a long-term bet on the pandemic-hit travel sector.
Australia's international border remains closed and Sydney is in its eighth week of lockdown following a Delta variant of COVID-19 outbreak.
Nevertheless, given the airport operator's strong long-term prospects, analysts and investors see scope for a higher share price.
Jefferies (NYSE 🙂 analyst Anthony Moulder said on July 15 that a price near $ 9 per share would be a more reasonable premium for the airport operator.
Sydney Airport will publish its financial results for the first half of the year on Friday. Sydney Aviation Alliance and AustralianSuper did not immediately respond to requests for comment.
($ 1 = 1.3565 Australian dollars)
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