Board says proposal undervalues airport
Would have been one of Australia s biggest buyouts
SYDNEY, July 15 (Reuters) - Sydney Airport Holdings Pty Ltd (SYD.AX) said on Thursday it would reject a A$22.26 billion ($16.6 billion) takeover proposal from a group of infrastructure funds, the biggest of a frenzy of Australian deals fuelled by record-low interest rates.
The operator of Australia s largest airport said directors had unanimously concluded the proposal undervalued the airport and was not in the best interest of shareholders. If successful, it would have been one of Australia s biggest buyouts.
Record-low interest rates have prompted pension funds and their investment managers to chase higher yields, leading to recent asset purchases from Telstra Corp (TLS.AX) and Qube Holdings (QUB.AX). read more
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Sydney Airport rejects $17b buyout proposal from infra funds citing undervaluation
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Analysis
During 18 months of the COVID-19 pandemic there has been precious little M&A activity in the airports sector apart from Brazil and Japan, where the groundwork had been long been laid anyway.
Many people have openly speculated when it would start up again, but all have been blindsided by an out-of-left-field proposal by an Australian/US consortium to take over Sydney Airport in what would be Australia’s biggest corporate transaction and the biggest single one in the airports sector for many a year.
No sooner had analysts picked themselves up than another major player in the sector was reported to be considering forming a consortium for a counter-proposal.