What is the new offer?
Readers may remember that roughly a month ago that a consortium, which included IFM Investors and QSuper, lobbed a revised bid for the company of $8.45 per share, which was an increase from the first offer of $8.25. Those bids were not high enough to get the Sydney Airport boards interested.
That consortium has come back with another bid of $8.75 for the business. This bid is also indicative, conditional and non-binding. The terms and conditions are consistent with the offer last month.
After taking advice and considering all the relevant factors, Sydney Airport said it intends to grant the investment consortium with the opportunity to conduct due diligence on a non-exclusive basis to enable it to put in a binding proposal.
This due diligence is expected to take approximately four weeks after entering into a non-disclosure agreement.
Will Sydney Airport accept this offer?
The company said that if the consortium makes a binding offer at a Sydney Airport share price of $8.75, then as long as the parties enter into an agreement acceptable to Sydney Airport (including the timeframe of the deal), then the boards said they currently intend to unanimously recommend that the takeover is approved by shareholders. However, that’s only if there are no better bids and an independent expert thinks it’s in the best interests of Sydney Airport investors.
The boards noted there is no certainty that there will be a binding offer from the consortium and investors don’t need to do anything at this stage.
Does the Sydney Airport share price fully reflect the offer?
Sydney shares are currently trading at $8.38, close to 5% higher than yesterday.
However, the Sydney Airport share price is still around 4% lower than the indicative offer price of the bid. But, a lot of things still need to happen before a potential takeover process is completed.
Passenger traffic continues to be impacted by COVID-19 effects. In July 2021, there were only 69,000 of domestic passengers (down 75.1% year on year) and 33,000 of international passengers (down 20.9%). That meant the total passengers were down 67.9% to 102,000. In 2021 year to date, total passengers were down 37.4% to 6 million.