Why some investors may be hoping the Sydney Airport (ASX:SYD) share price falls

Investors hoping for news of another takeover bid for Sydney Airport might be glad its share price is falling today.

| More on:
Woman sitting looking miserable at airport

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors hoping for a takeover of Sydney Airport Holdings Pty Ltd (ASX: SYD) might be cursing the recent rally in its share price.

The consortium of infrastructure investors – dubbed the Sydney Aviation Alliance – that’s been futilely bidding for ownership of the airport reportedly might need to increase their bid price to $9 per share.

This follows Sydney Airport stock’s recent 18 cent gain.

The rally was seemingly triggered on 26 August when Qantas Airways Limited (ASX: QAN) announced its planned return to international travel. Over the 10 trading days following Qantas’ announcement, Sydney Airport’s stock moved to finish last week trading at $7.93.

However, the Sydney Airport share price is slipping today. It’s currently $7.81, 1.51% lower than its previous close.

Let’s take a closer look at today’s news of Sydney Airport.

Has the final hammer fallen for the alliances’ takeover?

The recent Sydney Airport share price rally might have been detrimental to Sydney Aviation Alliance’s hopes to control the airport. However, bids may be back on the table following today’s share price drop.

Reporting by The Australian stated the airport’s previous gains might have seen the alliance tap out.

The Sydney Aviation Alliance put forward a bid to buy 100% of Sydney Airport’s stock in July, offering $8.25 a share. After its offer was rejected, it upped its bid to $8.45 apiece. Again, the airport denied the bid.

It stated both bids undervalued the airport and were taking advantage of COVID-19‘s impact on travel.

According to The Australian, the alliance may have needed to up its bid to $9 per share to gain the airport’s acceptance.

It seems Sydney Airport’s gains might have been bad news for investors hoping the takeover will eventuate.

One such investor may have been UniSuper, which holds a 15% stake in the airport. UniSuper has agreed to vote in favour of the takeover if it can reinvest its holding into the alliance.  

Yet market watchers looking at the Sydney Airport share price rally with trepidation will likely be feeling hopeful this morning.

Sydney Airport share price snapshot

Today’s fall included, the Sydney Airport share price has gained 21% year to date. It is also 33% higher than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Travel Shares

Man sitting in a plane seat works on his laptop.
Travel Shares

It’s gained 60% in 2 years, does the Webjet share price still have room to grow?

The travel stock has blue skies ahead according to these brokers.

Read more »

A happy couple who are customers of Flight Centre wait for their flight at an airport lounge
Travel Shares

Are we flying first class with Flight Centre shares?

Analyst sentiment is mixed but tilted toward bullish.

Read more »

a corporate-looking woman looks at her mobile phone as she pulls along her suitcase in another hand while walking through an airport terminal with high glass panelled walls.
Travel Shares

‘Downside is less severe’: Why some brokers are still bullish on the Qantas share price

This airline could see its shares fly higher.

Read more »

a couple at an airline ticket counter have an angry exchange with the employee behind the counter. She is leaning forward in an aggressive manner as they hold a paper ticket in their hands.
Travel Shares

Qantas share price descends as management recruited for ground-handling work

We check the latest on the airline.

Read more »

A woman looks nervous and uncertain holding a hand to her chin while looking at a paper cut out of a plane that she's holding in her other hand. representing the falling Air New Zealand share price today
Travel Shares

Why did the Flight Centre share price underperform the ASX 200 in July?

Let's fly in and examine.

Read more »

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.
Travel Shares

Are Qantas shares worth buying ahead of this month’s earnings result?

What's ahead for Qantas?

Read more »

qantas pilot putting hands to her face as if distraught
Travel Shares

Own Flight Centre shares? Here’s why the boss is predicting more pain for the travel sector

What's going on at Flight Centre?

Read more »

A woman wearing a hat, sunglasses and a bathing suit reads the newspaper while sitting on a lounging chair that's placed in a pool in a relaxing setting.
Travel Shares

Here’s what I consider to be the very best ASX 200 share to buy in August

This ASX travel share could be a top pick this month.

Read more »