Sydney Airport Holdings' shares rallied more than 38% Monday after receiving a buyout bid of $16.7 billion.
A group of infrastructure investors has proposed one of Australia's biggest-ever purchases, a A$22.26 billion ($16.7 billion) buyout of Sydney Airport Holdings Pty. Ltd., taking a longer-term view on the pandemic-hit travel sector, Reuters said.
SAH's stock closed at $7.78 Monday, its highest level since February last year, Financial Review said.
The Sydney Aviation Alliance (SAA) - a consortium comprising IFM Investors, QSuper and Global Infrastructure Partners - has proposed a A$8.25 per SAH share, a 42% premium to the stock's Friday close, the report said.
SAH said the proposal is below its pre-pandemic share price and said it was reviewing the offer. SAH's share price reached a record high of A$8.86 in January 2020, before the pandemic crippled travel demand.
SAA is understood to have a positive outlook on the eventual normalization of the world's air travel as more vaccines are rolled out, according to FR.
Sydney Airport's board is still considering the buyout proposal and has told shareholders to take no action. The board is led by new chairperson David Gonski, who replaced former chairperson Trevor Gerber during the company's annual general meeting in May.
In May, international traffic at Sydney Airport fell more than 93% from levels in the same month of 2019 as a result of Australia's largely closed border, while local traffic dropped 39%, The Star reported.
"It's the right timing to be looking at these assets which have got a 75-year life when conditions are arguably at the bottom," a Sydney Airport investor who requested anonymity, said.
If successful, the takeover of Australia's largest airport would be on par with the $22 billion buyout of mall operator Westfield Group by Unibail-Rodamco in 2017, Refinitiv data showed.
It would also be the eighth-largest deal worldwide for 2021 and the second-biggest airport buyout, next to the $30 billion purchase of the United Kingdom's Heathrow Airport in 2006, reports said.
