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Bloomberg
Sydney Airport received a A$22.3 billion ($17 billion) takeover offer from a group including IFM Investors in what would be Australia’s largest acquisition and one of the boldest bets on a recovery in global travel since the pandemic started.
The offer values Sydney Airport shares at A$8.25 each, the company said in a statement on Monday. While that’s 42% higher than last week closing price, it’s below the stock’s peak of around A$9 in late 2019 before Covid-19 devastated aviation. The shares closed up 34% to A$7.76 on Monday.
The suitors are seeking to capitalise on the slump in market value at Australia’s largest airport before global travel starts to pick up. While airlines worldwide have received billions of dollars in government handouts to survive the crisis, infrastructure providers like airports haven’t been helped on the same scale.
Sydney Airport, Australia’s main overseas gateway, has also been smashed by one of the most restrictive border policies of the global health crisis. The government effectively closed the international border in March last year, and also barred citizens from leaving. On the eve of the pandemic, close to 4 million passengers passed through Sydney Airport every month, a figure that almost completely evaporated within weeks.
The border is expected to stay closed until mid-2022 given Australia’s lagging vaccination program. Rolling state border closures to contain sporadic outbreaks have also played havoc with domestic travel. Sydney is in the midst of a two-week lockdown coinciding with winter school holidays when many people usually head north to warmer climes in Queensland.
However, a buyer of Sydney Airport may not have to wait long before air-travel demand more than recovers its losses. According to the International Air Transport Association, which represents almost 300 airlines worldwide, global passenger numbers will surpass pre-Covid levels in 2023.
IFM Investors, an infrastructure manager owned by a group of Australian not-for-profit pension funds, is a long-term investor that can weather another year of travel restrictions on a bet that tourism will soon return to normal. Including debt, the offer values Sydney Airport at A$30.4 billion, or about five times more than the A$5.6 billion the airport fetched when
it was sold by the government
in 2002.
IFM’s airport assets include Manchester Airports Group and Vienna International Airport, as well as stake in gateways in
Melbourne, Perth, Adelaide and Brisbane.