IFM, QSuper and GIP launch A$22.3bn bid for Sydney Airport

The bid is conditional on UniSuper, which owns 15% of the airports shares keeping its equity stake in the company.

IFM Investors, QSuper and Global Infrastructure Partners have joined forces in a A$22.3 billion ($16.7 billion; €14.1 billion) takeover bid for publicly listed Sydney Airport.

The company announced that it had received an unsolicited, indicative, conditional and non-binding proposal from the consortium of investors – known as the Sydney Aviation Alliance – to acquire all stapled securities in the airport at an indicative price of A$8.25 cash per stapled security, via a scheme of arrangement and trust scheme. One Sydney Airport stapled security comprises one share in Sydney Airport Limited and one unit in Sydney Airport Trust 1.

A review of the proposal is underway, with Sydney Airport’s board expected to update securityholders after weighing up the long-term value of the airport against the short-term impact of the pandemic.

In a statement, Sydney Airport said: “The Sydney Airport Boards note that Sydney Airport is a world class airport and one of Australia’s most important infrastructure assets.

“The indicative proposal has been made during a global pandemic, which has deeply affected the aviation industry and the Sydney Airport security price. The indicative price is below where Sydney Airport’s security price traded before the pandemic.”

While the offer price of A$8.25 per stapled security is lower than the A$8.97 high Sydney Airport shares were trading at on 6 December 2019, the offer price is slightly higher than the A$8.06 shares were trading at on 5 July 2019.

One of the consortium’s conditions for the transaction to proceed is that UniSuper – one of Australia’s largest superfunds, which owns approximately 15 percent of the airport – agrees to keep its equity stake and reinvest its shares, rather than accept the cash on offer.

When approached for comment, UniSuper said it was not privy to details of the takeover bid beyond what had so far been publicly disclosed by Sydney Airport and the consortium but was not averse to the proposal.

“UniSuper does… in principle, see merit in Sydney Airport being converted from a publicly listed company to an unlisted company. UniSuper also has a favourable view of the consortium partners,” it added.

“A final decision will be made by UniSuper in due course and after all details have been considered. Any decision will be subject to approval by UniSuper’s investment committee.”

Confirming it had approached the Sydney Airport’s board with a proposal, the Sydney Aviation Alliance said: “The proposal ensures substantial ongoing Australian ownership of this nationally significant infrastructure asset, with the consortium having a proven track record of investing billions of dollars in airports and other infrastructure assets, helping create Australian jobs while enhancing passenger and customer experiences.

“The consortium believes that the proposal, if implemented, would deliver significant value and economic certainty to Sydney Airport securityholders and is in the long-term interest of Sydney and the travelling public.”