Sydney Airport bid clears due diligence hurdle.

October 19, 2021
Photo: Steve Creedy

A consortium making a A$23 billion bid for Sydney Airport has cleared its first hurdle and finished its due diligence.

The airport announced in September that it would open its books so the alliance of IFM investors, QSuper, AustralianSuper and Global Infrastructure partners could perform due diligence after the consortium upped its offer to $A8.75 a share.

A stock exchange statement issued by Sydney Airport on Monday said negotiations were continuing over transaction documents with a view to the parties seeking internal approvals over the coming weeks.

“Should these documents be agreed, it remains the Sydney Airport boards’ intention to unanimously recommend that security holders vote in favour of the proposal, in the absence of a superior proposal and subject to an independent expert concluding that the proposed transaction is in the best interests of Sydney Airport security holders,’’ the statement said.

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“While relevant transaction documents remain under negotiation, the Sydney Airport Boards note that there is no guarantee that an agreement will be reached on these documents.”

The warmer reception for the September bid came after the consortium’s previous proposal in August of $A8.45 a share received short shrift.

The airport said at the time its boards had carefully considered the proposal but concluded it continued to undervalue the airport and was not in the best interest of security holders.

That stance came after a similarly blunt rejection in July of its previous bid of $A8.25 per share.

The airport pointed in its August statement to the rapid acceleration in Australian vaccination rates and government plans to progressively ease restrictions.

“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,’’ it said.

The airport has been bolstered by recent announcements that quarantine restrictions would be eased for Australian international arrivals in New South Wales and that interstate borders are progressively reopening.

While NSW Premier Dominic Perrottet’s surprise attempt to drop quarantine for all international travellers was shot down by Prime Minister Scott Morrison, he succeeded in introducing quarantine-free arrivals for Australian citizens and residents from November 1.

The NSW government is continuing to pressure for a further easing of restrictions.