The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price flew higher again today, up 2.89% at market close.
Today's gains follow the spectacular 34% leap on Monday by the time the closing bell rang.
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What's lifting the Sydney Airport share price?
At a time when COVID-19 variants are dominating the news – with renewed lockdowns coming into place around the world, including Sydney itself – Sydney Airport's surge this week may seem counterintuitive.
That is until you dig into the huge institutional investor interest in the pandemic addled company.
On Monday news broke that a group of big-name investors, namely IFM Investors, Global Infrastructure Management and QSuper, offered $8.25 per share to buyout the airport. The all-cash offer values the company at $22.6 billion, not including roughly $10 billion in debt the group of investors would also need to stump up for.
The Sydney Airport share price leapt 37% on open, before closing Monday up 34%.
At the current price of $7.85 per share, Sydney Airport is still trading almost 5% below the takeover offer price.
Yet it's unlikely the Board will recommend shareholders back the proposal, after the company already responded that the offer of $8.25 per share is materially below the $8.86 per share it was trading for in January 2020 before COVID shuttered much of its operations.
Rival offers in the pipeline
News out today that another consortium led by Macquarie Group Ltd (ASX: MQG) may offer a counter bid has likely put another tailwind behind the Sydney Airport share price.
According to the Australian Financial Review (which quoted people familiar with the matter):
Macquarie has been speaking with potential partners, including local pension funds, about making a joint offer… Macquarie may also use some of its own capital for the deal and could seek to rope in some of the MIRA funds' investors to join the consortium.
Whether Macquarie comes through with a superior offer, and how this all plays out, remains to be seen.
But with some market veterans, including Hamilton Lane's CEO Mario Giannini, expecting a raft more ASX shares to receive takeover offers, the Sydney Airport share price may not be the only one to enjoy a big boost this year.
