Sydney Airport [ASX:SYD] could have a new owner after a consortium of infrastructure investors raised their offer to $23.6 billion.
Sydney Airport today revealed it received a revised indicative, conditional, and non-binding proposal from the Sydney Aviation Alliance.
The consortium seeks to acquire the airport operator through a scheme of arrangement and trust scheme at an indicative price of $8.75 cash per stapled security.
The market reacted accordingly, bidding up Sydney Airport [ASX:SYD] shares by 4.7% to $8.37 a share, bringing the stock’s 12-month return to 50%.
Sydney Airport opens its books
Today’s revised offer from the consortium — comprising IFM Investors, QSuper, AustralianSuper, and Global Infrastructure Partners — comes after the group’s prior offers of $8.25 and $8.45 cash per stapled security in July and August.
SYD decided those offers were in the best interests of Sydney Airport shareholders.
Bar the raised price, SYD said all other terms and conditions of the offer are consistent with the consortium’s August proposal.
Will today’s elevated offer be enough?
Sydney Airport said today’s figure was enough for it to let the alliance conduct due diligence on a non-exclusive basis.
This will enable the consortium to put forward a binding proposal, subject to a non-disclosure agreement.
The due diligence stage is expected to take four weeks from entering the non-disclosure agreement.
If everything goes to plan and the consortium makes its $8.75 offer binding, the SYD board intends to unanimously recommend SYD security holders vote in favour of the proposal.
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What shall the future hold for SYD?
Sydney Airport is Australia’s only publicly-listed airport operator and a buyout of the sort contemplated by the consortium represents a large bet on the nation’s travel industry rebound.
In its latest half-yearly, SYD reported a 91% decline in international passengers, with total passengers down 36% for the half year.
Were the acquisition to go ahead, it would be one of the largest takeovers in Australian corporate history.
Which is pretty amazing considering we are only a month on from Square offering to buy out ASX darling Afterpay for about $39 billion.
To be expected with proposals so grand, weeks will go by before we get confirmation.
Plenty must happen before the consortium’s bid can go through…
An independent expert’s report, approval from at least 75% of shareholders, and approval from competition watchdog ASIC as well as the Foreign Investments Review Board.
The pandemic is definitely hurting the travel sector’s bottom line even as the market shifts an optimistic eye to 2022 and beyond.
But that’s not to say every sector was stunned by the coronavirus.
In fact, some sectors are flourishing.
A choice seven small-caps in these budding sectors were recently profiled by our guru Murray Dawes in a detailed briefing.
If you want to get your hands on it and have a read, you can do so here.
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