Key points
- The Sydney Airport share price gained 35% over the course of 2021
- Its major catalyst was a takeover offer posed in July
- The airport's stock was also likely impacted by COVID-induced travel restrictions and border closures
The Sydney Airport (ASX: SYD) share price took off in 2021, with much of its 35.4% gain spurred by a mid-year takeover offer.
That was a far more impressive performance than that of the broader market. The S&P/ASX 200 Index (ASX: XJO) gained 13% last year.
After closing 2020 trading at $6.41, the airport's stock was swapping hands for $8.68 at the end of 2021.
In between, it hit a high of $8.71 and a low of $5.48.
Let's take a closer look at what caused the Sydney Airport share price to jet higher last year.
What sent the Sydney Airport share price soaring in 2021?
Lockdowns, restrictions, and takeovers, oh my! 2021 was a whirlwind for owners of Sydney Airport shares.
Full year results
The first big news from Sydney Airport in 2021 was its results for 2020, released in February 2021.
Over the 12-month period, the airport saw a $107.5 million after tax loss. Its earnings before interest, tax, depreciation, and amortisation (EBITDA) also fell 45% compared to that of 2019, dropping to $627.8 million.
Additionally, it declined to pay a dividend.
However, the market seemed to have expected a worse performance. The Sydney Airport share price gained 2.5% the day its earnings dropped.
Border restrictions kept many travellers grounded
After suffering through 2020, Sydney Airport shareholders might have hoped last year would bring the reopening of Australia's borders and return to normality.
That hopefulness might have been bolstered by the announcement of the Trans-Tasman Bubble in April. However, it was likely shaken in May when the federal government stated international travel wouldn't be 'normal' until mid-2022.
Of course, as the year went on, COVID-19's Delta strain wreaked havoc, with much of Australia being plunged into lockdowns until October.
Finally, in November, Australia's international borders reopened and the travel sector seemed to be getting back to normal.
Except that, by then, the Sydney Airport had been handed a $23.6 billion takeover offer.
A takeover offer sent the Sydney Airport share price rocketing
On 5 July, the Sydney Airport share price took off to multi-year heights. It soared 33.9% after the airport was handed an $8.25 cents per share takeover offer.
The bid came from a consortium of infrastructure investors and superfunds, later named the Sydney Aviation Alliance.
10 days later, the airport rejected the offer, stating it didn't properly value the asset.
That began a to-and-fro. The consortium put forward a bid of $8.45 that Sydney Airport quickly rejected.
Eventually, in September, it offered $8.75 per share, which was accepted by the airport's board.
Shareholders will get the chance to vote on the acquisition on 3 February.
