In one of Australia's largest buyouts, Sydney Airport Holdings announced on Monday that it has agreed to accept a A$23.6 billion ($17.5 billion) takeover deal from an infrastructure investor group.
In a statement, the firm claimed it unanimously recommended the takeover bid from Sydney Aviation Alliance (SAA), which is made up of Australian investors QSuper, AustralianSuper, IFM Investorsand Global Infrastructure Partners from the United States.
The purchase of Australia's largest and only publicly traded airport operator comes after the government loosened international border restrictions for the first time since the coronavirus pandemic broke out.
According to the firm, a scheme implementation deed was signed on Monday, and a scheme meeting will be held in January next year.
It comes after SAA made a sweetened offer of A$8.75 per share in September, up 6% from its initial offer of A$8.25, persuading the company's board to grant the consortium access to due diligence.
"The Sydney Airport Boards unanimously approve the plan because the outcome reflects acceptable long-term value for the airport," Chairman David Gonski said.
The purchase is contingent on an independent expert's report, 75% shareholder approval, and clearance from competition regulators and the Foreign Investment Review Board, a process that may take months.
In a statement on behalf of the consortium, IFM Investors Chief Executive David Neal said they look forward to security holders voting on the proposed merger.
"As the aviation sector emerges from the pandemic, our alliance represents many millions of Australians... and we want to work hard to bring more flights and passengers back to the airport," Neal said.
The Australian Competition and Consumer Commission is looking at the deal's impact on competition, as well as the consortium's control of numerous airports across the country. Its findings are expected to be released on Dec. 16.
The board's "unanimous" recommendation, according to RBC Capital analysts, has "limited" the prospective share price appreciation, which was 2.67% higher at $8.45 on Monday.
"With just roughly 4% upside potential over the next 6 months (until the deal is finalized), the possibility is insufficient for us to take a more optimistic stance," they wrote to clients in a note.
