The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price will be one to watch on Monday.
This follows the release of an update on its takeover approach this morning.
Why is the Sydney Airport share price on watch?
The Sydney Airport share price could be heading higher today after it announced the receipt of a revised indicative, conditional and non-binding proposal from the Sydney Aviation Alliance.
According to the release, the Sydney Aviation Alliance has proposed to acquire the airport operator by way of scheme of arrangement and trust scheme at an indicative price of $8.75 cash per stapled security.
This represents a 9.4% premium to the Sydney Airport share price at Friday’s close. It is also an increase on Sydney Aviation Alliance’s previous offers of $8.25 cash per share on 5 July and $8.45 cash per share on 16 August.
However, unlike the previous offers which were determined not to be in the best interests of Sydney Airport securityholders, the Sydney Airport Board is open to this proposal.
What was the response?
The release explains that after taking advice and considering all relevant factors, the Sydney Airport Board intends to grant the Sydney Aviation Alliance the opportunity to conduct due diligence on a non-exclusive basis.
This is to enable it to put forward a binding proposal, subject to entry into a non-disclosure agreement on acceptable terms. That due diligence is expected to take four weeks from entry into the non-disclosure agreement.
Should all go to plan and the Sydney Aviation Alliance makes its $8.75 cash per share offer binding and on acceptable terms, the current intention of the Sydney Airport Board is to unanimously recommend that securityholders vote in favour of the proposal.
This will be in the absence of a superior proposal. It also remains subject to an independent expert concluding that the proposed transaction is in the best interests of Sydney Airport securityholders.
However, the company has warned that there is no certainty that a binding offer will be made. As a result, Sydney Airport securityholders do not need to take any action in response to this proposal.