Could this be a good time to be thinking about the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price?
Since the start of July 2021, the Sydney Airport share price has gone up by 34%.
What's going on with the Sydney Airport share price?
On 5 July 2021, Sydney Airport announced that it had received a non-binding proposal to acquire the business from a consortium of infrastructure investors at an indicative cash price of $8.25 per share.
The consortium comprises entities like IFM Investors, QSuper and Global Infrastructure Management.
In an initial response to the proposal, which is subject to a number of conditions, Sydney Airport has appointed Barrenjoey and UBS as its financial advisers and Allens as its legal adviser.
The Sydney Airport boards have commenced an assessment of the proposal.
Sydney Airport also said:
The Sydney Airport Boards note that Sydney Airport is a world class airport and one of Australia's most important infrastructure assets. Sydney Airport is Australia's largest airport and is the gateway to international travel in and out of Australia.
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. The boards are undertaking the value of the airport given its long-term remaining concession and the expected short-term impact of the pandemic. The boards will update securityholders accordingly.
Another bid?
According to reporting by the Australian Financial Review, it's possible that a consortium led by Macquarie Group Ltd (ASX: MQG) could try to put in a counter offer to this IFM-led bid.
The global investment bank has reportedly been communicating with potential partners such as superannuation funds and funds managed by Macquarie Infrastructure & Real Assets (MIRA).
It was also reported by the AFR that Macquarie could use some of its own money for the deal.
The potential offer "deliberations" are still at an early stage and there is no guarantee that a formal offer will come from this. One option, according to the reporting, was that Macquarie may want to be part of the IFM consortium.
Is the Sydney Airport share price worth looking at?
The brokers at Macquarie have a price target on Sydney Airport of $8.50, but the rating is 'neutral' though an increased offer is possible.
Credit Suisse's price target is $7.70 and it also has a 'neutral' rating on Sydney Airport. It notes there are still hurdles to pass, which means the indicative offer isn't guaranteed to turn into a binding offer.
Morgan Stanley also sees the potential problems for proposal to be carried out, such as the potential need for the sale of ownership holdings of other airports in Australia.
