The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has been on the move throughout this month. This comes despite Australia’s largest airport operator not releasing any market sensitive news over the last few weeks.
At Monday’s market close, Sydney Airport shares finished the day 0.12% higher to $8.28. While it edged slightly above yesterday, this brings the company’s shares to register a 4% gain in September.
What’s driving Sydney Airport shares higher this month?
Investors have been sending the Sydney Airport share price higher following a number of takeover offers and international travel resumption.
It all started back in July when Sydney Airport advised that a consortium of infrastructure investors proposed a $22.6 billion all-cash transaction to buy Australia’s largest airport.
The deal offered $8.25 per share, which represented a 42% premium on the company’s shares at the time.
However, the Sydney Airport board knocked back the proposal just two weeks after. It stated that the offer undervalues the company and is not in the best interest of shareholders.
A revised conditional and non-binding proposal soon followed a month later (16 August), sweetening the deal. The consortium of infrastructure investors tabled an improved $8.45 per share offer. Yet again, the board declined, noting that the current COVID-19 environment does not reflect Sydney Airport’s long-term value.
Then on 13 September, another offer arrived, upping the ante to $8.75 per share to acquire 100% of Sydney Airport shares. As such, the board appeared satisfied and allowed the consortium to conduct due diligence on a non-exclusive basis.
This means that the buyer will have access to Sydney Airport’s financial books to construct a binding proposal. Usually, due diligence takes around 4 weeks to complete, therefore leaving the finish date around mid-October.
International travel resumption
Another catalyst for Sydney Airport shares rising is the anticipated return of international travel.
Australia’s accelerated vaccination program is on track, with international borders opening up to selected countries in December. It appears investors are optimistic, preparing for a strong return on the travel sector.
In addition, the United States is set to lift travel restrictions for fully-vaccinated passengers from 33 countries in November. In hindsight, this means that the rest of the world is also opening up, with Norway and Denmark taking lead.
Sydney Airport could see passengers fill its terminals very shortly should there be no sudden new deadly variants like Delta.
Sydney Airport share price snapshot
Since the start of July, Sydney Airport shares accelerated on the back of several takeover offers received by the company. At current, its shares are hovering more than 40% above from 2 July (trading day prior to announcement).
Sydney Airport presides a market capitalisation of roughly $22.3 billion, with approximately 2.7 billion shares on hand.