Sydney Airport warms up to IFM-led team’s A$23.6bn takeover bid

Sydney Airport has granted due diligence to a consortium led by IFM Investors following a A$23.6 billion ($17.32 billion; €14.69 billion) further revised takeover bid from the group.

The indicative, conditional and non-binding proposal of A$8.75 cash per stapled security is the third offer from the consortium known as the Sydney Aviation Alliance, which also includes QSuper, Global Infrastructure Partners and AustralianSuper.

The consortium’s previous takeover bids of A$8.25 and A$8.45 cash per stapled security were rejected by the company’s board in July and August, respectively.

In a statement following the latest proposal, the company said: “Having taken advice, and considering all the relevant factors, Sydney Airport intends to grant the consortium the opportunity to conduct due diligence on a non-exclusive basis to enable it to put forward a binding proposal, subject to entry into a non-disclosure agreement on acceptable terms.

“The current intention of the boards is to unanimously recommend that securityholders vote in favour of the proposal in the absence of a superior proposal and subject to an independent expert concluding that the proposed transaction is in the best interests of Sydney Airport securityholders.”

The due diligence is expected to take four weeks, during which time the company will be open to considering other takeover proposals that might arise.

A spokesman for the consortium said: “The Sydney Aviation Alliance welcomes the announcement by Sydney Airport and looks forward to working with the boards to finalise the transaction in the interests of the airport’s securityholders, users and travellers.”

In August, the company highlighted the “opportunistic” timing of the consortium’s earlier takeover bid, which came as Sydney and other major cities in Australia entered extended lockdowns following a surge in covid-19 cases.

At the time, the company said the adverse situation did not change its boards’ view of the airport’s long-term value, adding: “Sydney Airport remains strongly positioned, has strengthened its balance sheet and tightly managed costs to maintain flexibility to respond to a range of recovery scenarios and to pursue sensible growth opportunities as the recovery unfolds.”