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  • 100% of stapled securities from SYD to go for $8.25
  • Price is below pre-pandemic levels, but a premium to recent trading prices
  • A number of conditions required including UniSuper reinvesting its holding of SYD

Sydney Airport Limited (ASX: SYD) recently announced that it received a takeover offer.

The unsolicited, indicative, conditional and non-binding proposal comes from a consortium of infrastructure investors, to acquire, by way of scheme of arrangement and trust scheme, 100% of the stapled securities in Sydney Airport at an indicative price of A$8.25 cash per stapled security.

The Consortium comprises IFM Investors (Nominees) Limited as trustee for IFM Australian Infrastructure Fund, Conyers Trust Company (Cayman) Limited as trustee for IFM Global Infrastructure Fund, QSuper Board (formerly the Board of Trustees of the State Public Sector Superannuation Scheme) as trustee for QSuper (formerly the State Public Sector Superannuation Scheme) and Global Infrastructure Management, LLC (on behalf of its managed and advised clients and funds).

Today, the Consortium, also known as Sydney Aviation Alliance, confirmed it approached Sydney Airport on 2 July.

The offer price

Sydney Aviation Alliance said the proposal at $8.25 per stapled security represented a 43% premium to the Sydney Airport closing price on 1 July, a 38% premium to 1, 3, and 6 month VWAP, and an 81% premium to the offer price of Sydney Airport’s A$2 billion equity raise in August 2020.

Sydney Airport, however, said the proposal is below the pre-pandemic security price, with analysis ongoing.

In September 2019, shares in the airport were trading close to $9, at the start of 2019, SYD was trading around $6.50, and Sydney Airport started 2018 at under $7.

The conditions

The Consortium has made the proposal on a number of conditions, including that “Sydney Airport’s largest securityholder, UniSuper, [agrees] to reinvest its holding into an equivalent unlisted and illiquid interest in the privatised Sydney Airport.”

Four other conditions, as stated by Sydney Airport include:

  • Provision by Sydney Airport of due diligence, and, if provided, satisfactory completion of that due diligence by the Consortium;
  • Approval from each of the investment committees of the Consortium members;
  • A unanimous recommendation by the Sydney Airport Boards that Securityholders vote in favour of the schemes of arrangement in the absence of a superior proposal, subject to an independent expert concluding that the Indicative Proposal is in the best interests of Securityholders; and
  • Entry into a mutually acceptable scheme implementation deed between Sydney Airport and a company owned by the Consortium members. Any scheme implementation deed would also be subject to a number of conditions, including Sydney Airport Securityholder approval, and court and regulatory approvals (including FIRB and ACCC).
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