Sydney Airport board sticks to its guns, knocking back sweetened takeover offer

Sydney Airport’s board has turned down a revised proposal to acquire the ASX-listed company from a consortium of infrastructure investors.

The revised offer by the ‘Sydney Aviation Alliance’ contained a slightly higher price at which it wanted to purchase Sydney Airport’s stapled securities at $8.45 each, valuing the company at $22.8 billion – up from the original $22 billion valuation based on the initial bid (which was later rejected, of course).

The revised proposal also included AustralianSuper as a new member of the consortium.

However, the board of Sydney Airport is still unsatisfied with the price that the Sydney Aviation Alliance is willing to pay, saying the revised offer still undervalues the company.

“In coming to this conclusion, the current environment does not change the boards’ view of the long-term value,” it said in a statement to shareholders.

“The boards also note the rapid increase and acceleration in Australian vaccination rates in recent weeks and the governments’ plans to progressively ease restrictions as the population reaches vaccination targets, which will then see the re-opening of travel.

“Sydney Airport remains strongly positioned, has strengthened its balance sheet and tightly managed costs to maintain flexibility to respond to a range of recovery scenarios and to pursue sensible growth opportunities as the recovery unfolds.

“At the current indicative price of $8.45 per stapled security, the boards continue to view the revised indicative proposal as opportunistic in light of the COVID-19 pandemic.

“The boards are open to engaging with the Sydney Aviation Alliance should the consortium be prepared to lift its indicative price to appropriately recognise long-term value for Sydney Airport security holders.

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